Pan Africa : launching a medium term buy signal? (PAF) – 28/07/17

We integrate the ETF Lyxor Pan Africa (PAF) into our Watchlist, while this ETF seems to rebound to the point of launching a medium-term buy signal. This index is composed of 30 stocks exposed equally in three geographical zones: North Africa, Sub-Saharan Africa and South Africa.

The expenses are relatively high at 0.85%, with an outstanding amount of € 59.4M. This index is naturally correlated with macroeconomics, especially commodity prices and interest rates. The recent rise in commodities (including oil) and the fall in the US dollar due to lower tightening of interest rates following the Fed's speech are powerful catalysts for PAF. Moreover, PAF is very exposed to South Africa whose index is currently in a bullish turnaround despite the problems of corruption that weigh on the economy. The weekly chart shows an upward movement, which is characterized by prices falling back above all moving averages to the point of inducing a bullish crossover of both the MACD and the EMA 13x26 in the coming days. The confirmation of this signal is needed before to jump in.

PAF : weekly data