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Top 5 Stock Market Indices for Africa

Africa is the least economically developed region in the world. As a consequence of that, it is also the place that may experience the greatest growth in the coming decades. For those who want to invest in Africa passively, we analyze its 5 most important stock market indices.



Whenever we talk about entire continents, it is hard to generalize. If a continent has many countries, as is the case in Europe, Asia or Africa, we realize how different and diverse these countries are from each other. However, we can also find certain things in common with the goal of analyzing a continent as one block.

Africa is a continent with about 1.3 billion people, and where the population increases very significantly every year. That means the total size of its economy grows constantly.

Despite this, when it comes to economic development per capita, Africa is many steps behind the rest of the continents. Hence, there is a lot of potential for economic growth. We could use the example of China half a century ago to describe what is possible when an underdeveloped economy begins to grow thanks to the right policies.

For those who want to read a detailed analysis on the reasons for and against investing in Africa, here is something I wrote about the topic:
Investing in Africa – Reasons for and against

When it comes to investing passively in Africa, only the richest countries on the continent, such as South Africa, or those in the middle, such as Morocco and Egypt, are eligible to receive our capital. This is because Africa’s poorest countries do not have sufficiently developed financial markets to be included in stock indices.

The largest stock market on the continent is that of South Africa. But there are a good number of countries that are working hard with the goal of modernizing their capital markets and facilitating foreign investment.

In the next few sections, we are going to analyze the 5 most important stock market indices for Africa. We will describe them in detail so you know exactly how they work. This will allow you to choose an ETF that fits your needs.

And remember that, if you want to invest in the least developed countries of the African continent, you will have to buy shares of individual companies directly.

Dow Jones Africa Titans 50

The Dow Jones Africa Titans 50 is a stock market index composed of 50 of the largest publicly traded African companies. These are the biggest corporations of the continent. The index is calculated and published by S&P Dow Jones.

Within the index, stocks are weighted based on their market capitalization adjusted for free float. And the index methodology caps the weight that a country or company can have in it. In fact, no country can represent more than 25% of the index’s value at the time of rebalancing, and no single company more than 8%.

It should be noted that some of the companies that are part of the Dow Jones Africa Titans 50 are listed on Western stock exchanges. This is because some large African corporations decide to list some of their shares on those exchanges so that investors are more likely to invest in them.

The sectors that dominate the index are raw materials, telecommunications and financials. If you want to read more about Dow Jones Africa Titans 50, you can visit the S&P Global website.

S&P Africa 40

Another index published by S&P Dow Jones is the S&P Africa 40, composed of 40 of the largest African companies. While similar to the previous index, there are certain differences between the two.

The S&P Africa 40 does not put a cap on the weight a company can have within the index. The only limit in place is for the number of companies per country. Thus, if the index in total has 40 stocks, the maximum number of stocks per country is 8. This is done to ensure sufficient representation from several countries. As a result, we can find companies from about 12 different countries.

Some of the most heavily represented countries are South Africa, Morocco, Kenya and Egypt. And the commodities sector is also dominant here.

Here is the link to the S&P Global website so you can find more information.

S&P Africa All

The S&P Africa All is the stock market index for Africa that includes the largest number of companies. Also calculated by S&P Dow Jones, it includes all African companies from major countries, as well as foreign companies whose economic activity takes place mainly in Africa, as long as they meet certain size and liquidity criteria.

While the exact number of stocks within the index fluctuates over time, it hovers around 400.

The countries included in this index are Botswana, Côte d’Ivoire, Egypt, Ghana, Kenya, Mauritius, Morocco, Namibia, Nigeria, South Africa, Tunisia, Zambia and Zimbabwe. And it is worth noting the high number of British companies whose subsidiaries operate in Africa and are part of the S&P Africa All.

The weighting of the stocks is carried out by market capitalization adjusted for free float, without any caps for either individual companies or countries. And the dominant sectors are raw materials, financials and consumer staples.

More details about the S&P Africa All are available under this link.

MSCI Frontier Markets Africa

The American company MSCI also calculates a couple of stock indices for Africa. One of them is the MSCI Frontier Markets Africa, composed of all African companies that are part of the global index for developing countries MSCI Frontier Markets.

13 countries are represented here. South Africa is not one of them, as it is the only African country classified as an emerging economy, rather than developing.

For this reason, the most important countries within the MSCI Frontier Markets Africa are Morocco, Nigeria, Kenya and Mauritius. And the most important sectors are financials and telecommunications. The smaller weight of the natural resource sector should come as no surprise, since many of those companies are indeed South African.

About 30 stocks are part of the index. MCB Group and Maroc Telecom are two of the most important ones. More information can be found on the MSCI website.

MSCI Emerging Frontier Markets Africa

Finally, for those who also want to include South Africa, MSCI calculates the MSCI Emerging Frontier Markets Africa. It is composed of all African companies that are part of either the global index for emerging countries MSCI Emerging Markets or the global index for developing nations MSCI Frontier Markets.

Because South Africa is the only African country considered emerging, this index is the result of combining all African companies in the MSCI Frontier Markets Africa with all South African stocks in the emerging markets index. In total, 14 countries are represented, although it is possible to find some foreign company that operates mainly on the continent be part of the index.

One thing to keep in mind is that, because companies are weighted based on their free-float-adjusted market capitalization, South African companies tend to dominate very strongly. In fact, approximately 90% of the value of the index is represented by South African stocks, with the remaining 10% being spread among the other 13 countries.

For this reason, if you want your investment in Africa to focus primarily on large companies and include South Africa, but be somewhat more diversified from a geographical perspective, it is probably better to consider the Dow Jones Africa Titans 50 or the S&P Africa 40.

Here is the link to the MSCI website so you can find more details about the MSCI Emerging Frontier Markets Africa.

I hope you found this post about stock market indices for Africa useful. If you want to learn about the most important stock indices in Europe, check out this link:
Top 8 Stock Market Indices in Europe

Finally, I also encourage you to subscribe to my newsletter in order to be on top of what is going on in the financial markets:
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