African Thoughts: April 29, 2013

World markets were very strong last week with some value players coming to the party after some recent jitters globally. Unfortunately for the large part, most of this optimism did not spill over to some of the African markets as the continent was a mixed bag from a performance point of view. As per usual, we take a look at some of the best and worst performing bourses on the continent.

Zimbabwe:

The Zimbabwean Mining Index was the best performer last week (+5.70%), but this should however be taken with a pinch of salt as volumes were very thin. Hwange and Falgold were the drivers behind the Mining sector’s performance. The Industrial Index also closed the week firmer by 0.16% as foreign buying continued to push prices. Econet was once again the major driver behind activity (38%) followed by Delta (19%). It must however be noted that activity was extremely quiet in Zimbabwe last week as the majority of investors remain on the sidelines for now. Dairibord announced that its nutritious foods and beverages unit Lyons will roll out tomato-sauce and salad-cream production plants (worth $2m) by the end of this month.

Ghana:

The Ghanaian market put in a solid performance last week with the GSE Composite Index gaining 1.07% to bring the YTD rally to an impressive 49.79% (on very low volume though). Another positive was the fact that activity increased last week thanks to blocks that went through in GCB (1.3m shares), Unilever (406k shares) and UT Bank (238k shares). Unilever reported Q1 2013 earning which saw profit fall 15.79% as a result of an increase in distributing and administrative costs. CAL Bank announced an increase of 166% in Net Profits for Q1 2013.

Nigeria:

As Q1 2013 results continue to get released and digested by market participants the Nigerian market was rather quiet last week apart from a select few block trades that dominated activity. On a positive note, the market managed to close in positive territory with the ASI gaining 0.50%. The financial services sector lead from the front in terms of activity (82% of trade) and performance with the Banking Index gaining 2.28%. Zenith Bank, ETI and Skye Bank all reported Q1 2013 earning last week with all three banks showing very solid numbers. Consumers however came under a bit of pressure with the Consumer Goods Index falling 1.20%. Unilever released Q1 2013 results which saw PAT of N1.3bn.

Kenya:

Profit taking continued in Kenya last week with the NSE 20 Index falling 1.7% while activity also slowed down dramatically to $20.25m (-47%). Safcom was the most active counter for the week, buoyed by strong foreign investor demand ahead of the FY13 results announcement on the 14th of May. Standard group released FY 2012 results which saw PAT increase 24.4% while Housing Finance released Q1 2013 figures which saw EPS increase 46%. The Kenya Revenue Authority announced that capital gains tax is likely to be introduced in June 2013 as they are looking to diversify their revenue base.

Egypt:

The Egyptian market continued with its bearish sentiment lead by notable selling from international and GCC institutions, leaving the EGX30 Index to fall 0.4% last week. Market volumes remain extremely weak. With the lack of any real catalyst along with the expected cabinet reshuffle and the resignation of the Minster of Justice which remains an overhang on the market. The market witnessed notable selling lead mainly from international institutions targeting names such as HRHO, OTMT, and TMGH respectively, yet local investors (institutional and retail) managed to absorb some of the selling to end the week as strong buyers benefiting from the various price hits targeting names such as COMI, OCDI and ORTE each ending respectively.

Mauritius:

The Mauritian market closed the week slightly lower with the Semdex falling 0.20% as volumes continue to dry up and underwhelm. Unfortunately there is not much to talk about as the market was very dull. Banking stocks ended the week mixed with SBM falling 1.0%, Bramer Banking falling 1.4% while MCB closed unchanged.