African Thoughts: April 25, 2016


It was an absolutely dismal week from an activity point of view in Lagos with daily turnover not breaking the $10m mark once, while total value traded for the week fell -20.45% to $29.14m. Things got off to a very shaky start last Monday when technical issues delayed the start of the session, which happened once again on Tuesday but was eventually resolved by Wednesday. Whatever little activity there was was dominated by the likes of GTB, Zenith and NB. The market managed to close in positive territory with the ASI gaining +0.53% thanks to banking stocks as the sector gained +3.82% as there were good performances from ETI (+5.98%), Stanbic (+4.76%) and GTB (+3.58%). Consumers closed slightly lower with the index falling -0.83% with weakness in Nestle (-3.13%), 7UP (-3.0%), Guinness (-1.90%) and NB (-0.28%). Unfortunately with such low volumes and lack of interest there is not much else to report from Lagos.


After three consecutive weeks of losses, the market managed to stage a small rally and closed the week higher with the NSE 20 Index gaining +1.0%, taking the YTD gain to +1.3%. The move can be attributed to foreigners being net buyers to the tune of $3.4m while their participation stood at 68.7%. It was a much better week from an activity point of view as turnover increased +66.6% to $33.2m. Safcom was the week's most active counter as the telco accounted for 31.1% of activity and closed the week unchanged after we saw some profit taking emerge towards the end of the week. There were also quite a few crosses in EQBNK (+1.9%) over the course of the week as foreign demand drove the name higher. KNCB recorded net foreign outflows for the fourth consecutive week to the tune of $2m. EABL was one of the best performers last week as the brewer managed to gain +4.8% on foreign demand. Britam managed to bounce after it had a torrid time the preivous week with the counter closing +19.8% higher on local retail demand.


The market's recent rally continued last week with the Industrial Index gaining +0.95%, trimming the YTD loss to -13.56%. This should however be taken with a pinch of salt as the rally has been on very thin volumes. There were some good performances in the likes of Innscor (+4.81%), Delta (+3.66%) and NatFoods (+0.17%). It was a dire week in terms of activity as turnover fell -47.46% to $1.4m with some small activity in NatFoods, Dawn, Econet and Delta. Unfortunately we expect the trend of complete lack of interest from foreign investors to continue.


The market came under pressure from local sellers in Port Louis last week as the Semdex fell -1.1%, taking the YTD loss to -2.5% while foreigners were net buyers to the tune of $310k. Activity was geared towards MCBG, Terra and SBMH as they accounted for 56.6% of turnover on a very quiet week on the island. Banking stocks closed the week in negative territory with SBMH losing -1.5% while MCBG fell -0.5%. Hoteliers were also week as NMH (-3.5%), SUN (-0.7%) and LUX (-0.4%) all closed the week lower.

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