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Ghana – best performing stock exchange, 2003

Databank, run by the very brilliant Ken Ofori-Atta, is reporting that Ghana’s stock exchange had the best returns of any equity market, worldwide, in 2003. Ghana’s stock market returned 144%, in US dollar terms, for 2003, followed closely by Uganda at 140% and Kenya at 112%.

Ghana’s tremendous performance owes something to the Ashanti Goldfields takeover by Anglo American and something to the dollar’s decline. But Databank points out that, as a whole, Africa returned 37% on equity markets. Remove Zimbabwe, the world’s worst performing stock market (for obvious reasons) and that return rises to 44%. Which means:

This compares favourably with a return of 30% by the MSCI global index, 32% in Europe 26% in the US (S&P) and 36% in Japan (Nikkei).

Throwing a little cold water on this news is Andrea Bohnstedt for World Market Research Centre, who points out:

Although often delivering unexpectedly good performances, many stock markets in sub-Saharan Africa remain small and therefore illiquid. This indicates that they are primarily of interest for specialised investors with a long-term investment horizon and a higher risk tolerance.