African Thoughts: April 10, 2012

With the Easter weekend coming up towards the end of the week last week, most market participants seemed happy to take stock of recent events and sit on the sidelines as markets were rather quiet barring a few relatively decent crosses here and there in some of the markets. Most markets were closed for Easter Friday and this past Monday with Mauritius being the exception.

Zimbabwe:

The Zimbabwean Mining Index surprisingly enough was the strongest performer on the continent last week with the Index rallying 4.9%. The move higher came as a result of Bindura rallying 15% after announcing that they have secured new Chinese investors to capitalize the business, which has been under care and maintenance for a while. Riozim rallied 20% after the approval of a plan to recapitalize the company through a rights issue as well as convertible debenture loan stock. The Industrial sector was rather dull with the Index falling 0.60%. There have been rumors doing the rounds about President Mugabe’s health, which have recently been denied by the Zimbabwean Government. We will keep you posted on further developments.

Nigeria:

Nigeria put in a solid enough performance last week with the ASI gaining 1.4%. There were a number of companies that reported full-year results last week with heavyweight Dangcem reporting full-year profit after tax of N125.909bn. Aliko Dangote announced that he plans to list 20% of his Dangote Cement Plc on the London Stock Exchange next year. Diamond Bank reported Q1 numbers which saw PAT increasing 351.16%. The market seemed to have liked these earnings as the name has subsequently rallied to N2.54. The Debt Management Office announced last week that they would like to cut domestic borrowing to N461.8bn by 2015 from N744bn this year.

Kenya:

Kenya was also amongst the best performers last week with the NSE 20 Index gaining 1.1%. Big news out in Kenya last week was that the MPC decided to keep the Central Bank Rate at 18% despite inflation falling to 15.61% in March. The Kenya Airways rights started trading last week with 228,200 units changing hands at 0.05 on Tuesday. Kenya Airways secured a loan of $47m and revised its target of annual new connections to 300,000. Banking stocks KNCB and EBNK were the two biggest contributors towards value traded last week ahead of the MPC rate decision.

North Africa:

North Africa came under pressure last week with Morocco and Egypt being the worst performing markets on the continent. Egypt was the worst performer with the EGX falling 4.5%. There was some tension on the political front as the Muslim Brotherhood announced Khairat El Shatter as their presidential candidate (which was not expected). ORTE came under some pressure after a UAE news website posted that Algeria may turn down the Djezzy deal.

Morocco :

Morocco also came under the whip, falling 3.2%. Big news out of Morocco last week was that Telco giant Moroc Telecom announced a new share buy-back program of 1 million shares for a period of 18 months starting May 7th with a price range of MAD 106 – MAD 188.