African Thoughts: April 08, 2013

With some bad economic news out of the Euro area and the United States last week global markets ended the week in the red for the most part. There was however a few African markets that managed to buck this trend. We take a look at some of the best and worst performing bourses across the African continent.

Kenya:

After the Supreme Court’s ruling in favour of president elect Uhuru Kenyatta over the previous weekend, the Kenyan market managed to rally and was the top performing market on the continent, gaining 2.6%. Foreign investor inflows increased over the course of the week and reached $14.03m as they sought exposure to EABL which was the biggest contributor towards activity. On the economic front following an increase in the first two months of the year inflation for March slipped 34bps to 4.11%. Inflation has declined from a high of 18.96% in December 2011 when the Shilling was trading at 107 to the U. S Dollar.

Nigeria:

The Nigerian market was driven higher by banking stocks last week with the ASI gaining 2.28% while the Bank 10 Index managed to gain 1.00%. Consumer stocks had a rather dull week (from a performance point of view) with the Consumer Goods Index gaining 0.09%. There were a few big names that released results last week with Access Bank announcing gross earnings of N208.309bn. Zenith Bank announced a profit after tax of N100.681bn (+106.72%). Nigerian sovereign bonds have been added to a $1.7 trillion local-currency emerging-market index by Barclays Bank Plc.

Zimbabwe:

As is often the case in Zimbabwe the market ended the week mixed with the Industrial Index gaining 0.71% while the Mining Index fell 0.33. It was rather subdued week from an activity point of view as value traded amounted to $5.75m with foreign purchases accounting for $3.98m of total purchases. Most of the activity was skewed towards the big names, i.e Innscor, Delta and Econet. Natfoods rallied +15.6% to an all-time high of 208c after releasing solid results last week.

Egypt:

The Egyptian market fell 1.3% last week as a result of the ongoing political distress in the country, as market volumes remain extremely weak. The market traded the week with a static sentiment with local institutions notable buyers in the market, after being notable sellers the week before. ORTE witnessed notable volumes after the news that EFSA got a Bid for ORTE by Altimo unit (major Vimplecom shareholder) with an offer price of USD0.70 per share which is 23.3% below our fair value and implying a premium of only 10% which created further negative sentiment on the market. it’s worth mentioning that OCDI announced that the State Council issued a favorable ruling for SODIC in the court session held yesterday, which means that OCDI now has full legal ownership of the land, and the decision affirms SODIC’s right to develop Eastown until the case is judged on its merits, however, this did not touch upon any potential fees that SODIC would need to pay.

Mauritius:

After the flashfloods that hit Mauritius over the previous weekend, last Monday was declared a national day of mourning with the market closed for trading. The market closed the week lower (-0.8%), driven lower by the two major banking stocks MCB (-0.3%) and SBM (-1.00%). Bramer Banking managed to buck the down trend in the banking sector with the name gaining 2.8%.