Whilst equities were in the red in 2014, it was a strong year for Africa bond indices, according to Tim Edwards, Senior Director, Index Investment Strategy at S&P Dow Jones Indices.

The S&P Africa Sovereign Bond Index posted 1.66% and the S&P Africa Sovereign Ex-SA Bond Index closed at 2.91% for the year.

“In the fixed income markets, a mixed month completed a strong year in Africa bond indices. Our pan-regional indices even posted gains for the year in U.S. Dollar terms, some feat for a year in which the U.S. currency gained by 10% or more against many local currencies,” he said.

“With 10-Year U.S. Treasury yields recently dropping below 2% and other developed markets offering yields that are mere fractions of a percent, the double-digit yields offered in Africa have been attracting attention,” he added.

In December, the S&P All Africa index slumped by 5.0% – double its gain over the previous eleven months - to record a total return of -2.5% for the year.

According to Edwards, for the year, among regional stock indices only three were in the green.

The S&P East Africa 10 index soared 21%, the S&P Africa 40 index was up 14% and S&P North Africa 15 index added 13%.

“A poor December did not prevent Egypt from boasting the best returns among the major single-country equity markets for the year. The S&P Egypt BMI delivered a total return of 29% in 2014, with second-best performer South Africa posting an 18% gain,” he said.

“While Egypt’s performance was credited to a highly depressed valuation a year ago, South Africa’s performance is particularly laudable given the challenges to commodity producers and emerging markets generally this year,” he added.

The S&P Nigeria BMI index was the worst hit, falling 6.8% in December and recording a total return of -28% for the year in response to a collapsing oil price.

The S&P South Africa Dividend Aristocrats topped the charts in 2014 among South African equity indices, closely followed by the S&P South Africa Low Volatility Index.

“Based on such performances, the popularity of dividend and low volatility based investment themes looks set to continue into 2015,” concluded Edwards.