African Thoughts: August 04, 2014

Nigeria:

With the shortened trading week due to the Eid celebrations activity was obviously rather subdued (on a week-on-week basis) in Lagos with total market turnover amounting to $121.3m with large crosses in the big names the highlights as per usual. The market struggled from a performance point of view with the ASI falling -0.83% with the banking sector being a major drag on the market as the Index fell -3.22%. Consumers (+0.14%) on the other hand managed to close the week on the front foot. Results season was fully underway last week with the likes of Flourmills, Wapco, FBNH, GlaxoSmithKline, Diamond Bank, Ecobank, Skye Bank, UACN, Nestle, Stanbic, FCMB, Zenith Bank, Intbrew, NB, Unilever all releasing results.

Kenya:

It was a strong week in Nairobi from a performance point of view with the NSE 20 Index gaining +1.3%, however on the negative side, turnover fell 39.5% to $25.2m on a fall in foreign participation (41.2%). Both major banks KNCB and EQBNK announced H1 2014 results with EPS increasing +13.7% and 21.5% respectively. EABL had a strong week (on relatively low volume) with the brewer gaining +3.8% ahead of FY 2014 results due to be released this week. In the brewer's parent company results, management highlighted performance of the East African market. Centum announced that they are set to acquire an additional 66% shareholding in K-REP Bank Limited to bring its total shareholding to 67.54%. The Central Bank of Kenya (CBK) published its quarterly Kenya banking sector performance report. In 2Q14, sector gross loans increased 5.3%q/q vs. 7%q/q in 1Q14. Inflation for July 2014 increased +7.67% as a result of higher food and electricity prices and as such has now breached the target of 7.5% set by the Central Bank.

Zimbabwe:

On the face of it, it was a very strong week in Harare with the Industrial Index gaining +3.04%, but this should however be taken with a pinch of salt as value traded fell -25.89% to $5.55m. On a positive note, foreign participation increased as they accounted for $3.07m of total purchases and $1.71m of total sales. The usual suspects Econet (28%) and Delta (14%) were amongst the week's most active counters with some solid action in CBZ (19%) and Bindura (13%) also being rather active thanks to a few crosses. There have been reports doing the rounds that the Zimbabwe government is on the verge of securing a $4bn bailout from China.

Mauritius:

The market managed to close slightly higher in Port Louis with the Semdex gaining +0.3% to close at 2,097.86. Turnover was relatively average for the week with NMH, MCBG, SBM and Bramer accounting for 63% of activity. The two major banking stocks closed mixed with MCBG gaining +0.8% to close at Rs214.75 while SBM closed unchanged at Rs1.07. There was a foreign cross of 3m shares in the usually illiquid Bramer Bank which helped boost turnover. NMH had a rather solid week from both a performance (+0.6%) and activity point of view as the counter was the most active name on the bourse.