African Thoughts: April 13, 2014


All eyes were on the delayed Nigerian Presidential elections in March. As a result the markets were generally quiet in the weeks leading up to this but we did see a marked pickup in activity as the results came out. Below follows a brief summary of the main markets.

Nigeria:

The NSE ASI rose by 5.45% for the month while market capitalization was up by 6.70% to N11.9tn (reversing the YTD loss). Champion Breweries emerged as the largest gainer in the month by gaining 37.65% to N7.02 while UACN suffered the largest loss during the month with a loss of 19.74% to N32.40. Other notable gainers included Fidelity Bank (+34.38%, N1.72), FCMB (+30.91%, N2.88) and Total (+28.56%, N180) while the losers included the likes of Costain (-16.44%, N0.61), Betaglass (-16.65%, N22.57) and Seplat (-15.32%, N398). During the month Zenith Bank (N12.8bn) and NB (N10.9bn) were the most significant contributors to total value traded. The Naira rose to N203- N205 against the Dollar following the peaceful presidential elections held on the 28th and 29th of March, whereby General Muhammadu Buhari, from the All Progressive Party (APC) was elected as the President. It is expected that the President elect will take up his position on the 29th of May 2015. In other company news: Oando made a prepayment of $238mn for certain loan facilities, after successfully realizing $234mn from its crude oil hedge program and also completed a market trade worth N1.49bn between Brownrock Ltd (buyer) and Ocean and Oil Development Partners (seller); GT Bank announced the retirement of the banks Chairman of Board of Directors, Mr Egbert Imomoh. He was replaced by Mrs Osaretin Demuren and Skye Bank is set to raise N50bn ($250mn) in share sale, to boost liquidity and fund operations. The bank had earlier signed an agreement with Stanbic IBTC and FMDQ to issue N100bn in commercial paper to increase its ability to do transactions.

Kenya:

The NSE 20 Index closed down by 4.4% for March as equity turnover slumped by 25.37%. March featured FY14 results announcements from most companies. This time however, positive performance was not accompanied by price rallies with most names closing soft. The most notable losers were Diamond Trust Bank (-2%), Equity Bank (-3%), TPSEA (-4%) and Uchumi (-2%). The top performers were KCB (+1%), Centum (+7%) and Safaricom (+8%). The telecom giant reached an all-time high of KES17.50 on the back of high demand before profit taking by foreign investors occurred as the month came to a close. Co-Op Bank (-6%) net flows stood at $0.92m after the bank released firm FY14 numbers, while Equity Bank recorded the highest net outflow ($14.8m) for the third consecutive month. In economic news, inflation went up 6.31% from 5.61% due to increased food prices.

Zimbabwe:

The market remained in negative territory falling by 4.81% in March to close at a market capitalization of $4.49bn. The Industrial Index fell by 5.38% to 158.22 points weighed down by losses across the board, particularly in heavyweights Delta (-8.70%), Econet (-2.91%) and Innscor (-6.78%). The months biggest gains were recorded in smaller names (mostly traded by local investors) like MedTech (+100%), Truworths (+87.50%), Zimpapers (42.86%) and Mashonaland (+12.50%). Turnover declined by 49.13% to $18.14mil, with average daily trades of $0.82mil recorded for the month as interest in the ZSE remains low. Dawn, Econet and Delta were the value leaders for the month, contributing 23.94%, 18.14% and 15.44% towards turnover respectively. Mixed to negative performances were reported by the likes Natfoods, Dairibord, Colcom and Padenga, just to name a few as the economy remains constrained.

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