Update July 2022

The Frontier Markets index rose 4.2% in July, while the returns of the TCM Frontier funds were on average in line with the indices. Sentiment was positive on global stock markets as a result of better-than-expected corporate results and signs that inflation may be declining slightly. The further rising US dollar was also positive for the Frontier Markets. The big winners this month were Kenya (+15.5%), Kazakhstan (+12.1%) and Egypt (+5.7%). By contrast, there were losses on the stock markets in Pakistan (-15.2%) and Nigeria (-1.0%).

The loss in Pakistan was largely driven by a decline in the currency due to political unrest and concerns about the government budget deficit. In Nigeria, the stock markets came under pressure after a fall in the oil price.
Despite the small loss, the Nigerian All Share Index is still up 37.6% for the year. The Nigerian stock Airtel Africa, also the largest holding in TCM Africa (5.2%), was the star of the local stock market. The share managed to add 20.7% to the price in July. The telecom company posted double-digit revenue growth in the second quarter. Total revenues, for mobile and mobile money services combined, grew by 18.3% in Nigeria, 14.1% in East Africa and 11.7% in Francophone Africa. The company will continue to grow strongly this year, and despite inflationary pressures, it will continue to focus on cost cutting which will also support margins.

The Kenyan Nairobi Securities Exchange All-Share Index rose 15.4%, the largest increase in July since the index's introduction in 2008. Safaricom, which weighs more than half of the main index, rose 22.3%, the biggest increase since November 2009 thanks to local bargain hunters. The company is part of both the TCM Global Frontier portfolio and the TCM Africa fund. For the beginning of August, investors are expected to be somewhat cautious. Kenya will hold the presidential election on August 9, with Vice President William Ruto and former Prime Minister Raila Odinga as the leading candidates to replace Uhuru Kenyatta.

Finally, sentiment in Vietnam was also positive with the Ho Chi Minh index (+3.7%) and Hanoi index (+6.6%). The Vietnamese economy continued to perform strongly in July. Retail sales, for example, increased 42.6% year-on-year after a bad month last year due to corona. The increase was driven by an upturn in consumer demand, particularly in the hospitality and tourism sectors. In addition, industrial production rose 11.2% year-on-year in July.