African Thoughts: April 15, 2013

Despite a soft close to the week last week as US retail sales continued the run of weaker US data, global markets still had a strong week as risk sentiment was generally turned on. African markets did not track this but were mixed across the board. Below is a summary of some of the best and worst performers in our universe.

Zimbabwe:

The momentum continues into Q2 as most stocks continue to trade higher post results season. Demand for most names remains strong as investors remain bullish about the upcoming elections, despite the ever prevalent political noise. The Industrial Index gained 1.69% for the week, an impressive 23.57% gain for 2013 thus far. Talk of future capital raise deals and restructuring plans add to the bullish sentiment. Foreign participation also continues to be strong as they accounted for 73% of the weekly turnover. Delta and Econet were once again the most actively traded stocks, some aggressive buying in Delta contributing to a 8.23% rise to 125c although Econet was slightly soft, ending the week at 66.8c.

Nigeria:

The Nigerian ASI fell by a disappointing 2.3% last week as profit taking in a variety of names (mostly banks) hurt the market. Despite this, the ASI is still up a superb 19.36% YTD. The week was all about the banks as the Banking sub-sector closed down 5.36% as profit taking clearly evident. Early in the week Diamond Bank announced results which included a nil dividend. This meant that sellers hit the name and the sector with force as they were happy to take profit after a great run in recent months. After 2 days of weakness, the buying returned in the latter part of the week as investors decided that the valuations were attractive after the price drops. There were also some chunky crossing in the sector as Access, Diamond and ETI extremely active. In the other sectors, IHS saw some block trading going through in the normally illiquid telco company. Consumers saw a lot of action as well, yet the sub-sector softened towards the end of the week to close at +19bps for the week.

Egypt:

The market managed to rally last week regaining some of the previous week’s losses on notably improved volumes, mainly driven by notable buying from local and GCC institutions. International institutions continued to be net sellers in the market , this is attributed to many reasons such as a government spokesmen (president's advisor, and head of economic committee in MB) stating that the government will not impose a capital gain tax and that government will refund back the taxes collected from the NSGB/QNB deal hence removing the market anxiety towards an implantation of a capital tax law, adding to this after news that Egypt will receive USD 5bn in CBE's deposits coming from Qatar and Libya to boost investor interest and confidence. Its worth mentioning that the real estate sector managed to regain investors interest, with names such as PHDC, OCDI and TMGH witnessed notable volumes.

Kenya:

After a sluggish and soft start to the week the NSE20 improved and eventually closed up 70bps for the week. However, foreign activity dropped substantially which always has a material impact on the NSE. Safcom was impressive, gaining 3.2% (touched 12 month high of KES 6.60) and was also the week’s most active name before eventually settling at KES 6.50. Equity Bank remained well bid (+70bps, KES35) while KNCB fell by 1.2% to KES42). EABL was also soft as it fell 1% to KES304.

Mauritius:

A sluggish week in terms of volumes yet a marginally positive week for the Mauritian bourse as SBM (+1%) and Alteo (+50bps) the main reasons for the outperformance. Contra to SBMs strength, MCB continues to trade softly as it closed down 90bps at Rs189 while Bramer Banking gained 3.6%. In the hotel sector, NMH closed unchanged at Rs72 while Lux Island Resorts gained 2.3% to Rs17.90. Other news out early today is that tourist arrivals rose by 9.5% in March 2013, mostly due to the increase in flight routes. Chinese vistors gained an incredible 68.6% while Reunion Island visitors rose by 36.7%. South African visitors rose by 13% while main European market visitors rose 1.7%, all this offset by a 49% drop in Russian visitors.

BRVM:

The market lost 2.54% last week as the following sectors all recorded losses: Editing, Agro-processing, Telecomms, Distribution and Banking. As always in the BRVM, the only stock that really trades in Sonatel, the name closed up marginally at XOF16,050.

Botswana:

The DCI continues its bull run as the index was up 1.46% for last week. The main outperformers were RPCD (+20%) followed by Choppies (+7.14%, 300t) and Letshego (+39bps, 258t). Choppies is up an incredible 46% for the year thus far! Letshego was the most active name with some chunky crosses taking place throughout the week.

Tanzania:

An increase in trading volumes as demand in the banks drove up volumes, the sector up 2.51% as CRDB demand pushes the index higher. TBL also saw some buying from “foreign” investors, but don’t be deceived as these “foreign” investors were East African, i.e. Kenyan and Ugandan.