SA is still the most attractive financial market for international investors in Africa, according to the Absa Africa financial markets index.

The country remained in the top position for the second year running with a score of 93 out of 100, supported by strong financial market infrastructure and a robust legal framework.

Despite this, the report warns that SA’s macroeconomic performance deteriorated in the past year as it plunged into recession for the first time since the global financial crisis, exposing SA to "rising financial risks".

This could result in the country being challenged for the top spot by the likes of Kenya, Nigeria and Botswana.

The index, produced by the Official Monetary and Financial Institutions Forum, ranks the attractiveness of various financial markets for investors. It was compiled last week and officially launched on Wednesday.

Now in its second year, the index is a premier indicator of the attractiveness of Africa’s financial markets, for use by governments, investors and asset managers around the world. Click here to download the report:

It looks at market depth, access to foreign exchange, tax and regulatory environment and market transparency, capacity of local investors, macroeconomic opportunity, and enforceability of financial contracts, collateral positions and insolvency frameworks.

In 2017, SA topped the index on all fronts. But this year it is second to Kenya in access to foreign exchange and behind Nigeria in market transparency, tax and regulatory environment.

"SA’s open and highly liquid foreign exchange market has exposed it to capital outflows, reflecting concerns about the country’s macroeconomic trajectory," says the report.

Of all the countries surveyed, SA is the only one where the total value of listed equities is more than $100bn, standing at $1.1-trillion. SA has more than $40bn worth of listed corporate bonds, compared with the average value of $707m for the other 19 countries, and a bond turnover of almost 300% of market capitalisation compared with the average value of the other countries of 20%.

According to the report, SA and countries such as Ghana and Kenya are lowering barriers to entry for small firms. It says capital markets in Africa have strengthened against a more stable regional political and economic background.

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