African Thoughts: August 19, 2013

The global picture was a rather mixed one last week with the Euro zone finally breaking out of a recession with positive GDP numbers while there were some technical glitches in China which affected investor confidence and caused Asian markets to fall. The African picture was also a mixed one and as per usual we take a look at some of the best and worst performing markets from across the continent.

Mauritius:

Mauritius was finally able to break the shackles and put in a positive performance for the week with the Semdex gaining 1.2%. The move higher came on the back of good performances in banking stocks MCB and SBM which managed to gain 0.5% and 2.0% respectively. SBM posted better than expected results as well as a higher dividend. NMH was exceptionally strong and managed to gain 6.3% as investors seemed to find some value at theses lower prices. Foreign interest returned to the market as foreign investors were net buyers. Tourist arrivals increased by 1.6% in July 2013 to reach 77,374 visitors compared to 76,166 visitors in July 2012.

Kenya:

It was a rather busy week in Nairobi thanks to a number of large block trades that took place during the course of the week as foreign investor’s boosted activity. The most impressive of the large blocks was the 19.14m NMG at KES 313 that went through on Wednesday, which saw 10% of the company’s issued shares sold to a foreign domiciled entity. Kenya Commercial Bank was another impressive performer from both an activity and performance point of view with the counter gaining 2.3% for the week to close at a new 12-month high of KES 45 as foreign investors sought after the name. Safcom extended its gains and rallied 4.5% to close at KES 8.05, levels last seen during the Telco’s IPO. The market also extended its recent gains with the NSE 20 index gaining 1.0%. Scangroup gained 11.2% closing the week at KES 69.50, after its anchor shareholder Cavendish announced that it intended to increase its shareholding in the advertising firm from 33.62% to 50.10%. CFC Stanbic released H1 2013 results last week which saw an increase of 81.4% in PAT.

Zimbabwe:

It was a shortened trading week in Harare thanks to holidays on Monday and Tuesday but the market was not able to get any form of respite as the Industrial Index fell 4.11% while the Mining Index fell 17.07%. The post-election panic continued to grip the market as foreign investors remain very jittery with regards to indigenization policies, etc. The depressed market prices coupled with the sudden spat of supply has seen the market register some of the most heavily traded weeks in recent months. In just a couple of weeks the ZSE has seen in excess of $35.6m exchanging hands on the bourse of which $20.6m was yielded in the week under review after a major boost came from a block trade in banking group CBZ driven by renewed foreign interest. We are still expecting a “wait and see” approach from a number of foreign investors in the upcoming weeks.

Nigeria:

It was a rather strange week in Lagos last week as although volumes were relatively good, activity was dominated by block trades in a few select names, i.e. Zenith Bank, First Bank and Nigerian Breweries. The market came under the whip with the NSE 20 Index falling 2.96% thanks to a rather poor performance in consumer stocks as the Consumer Goods Index fell 3.59% with the likes of PZ Cussons falling 6.45%. Banks were also on the decline with the Bank 10 Index falling 2.46% as the sell-off was rather broad based. With the summer period drawing to a close in the northern hemisphere we expected trading to be dominated in a few select blocks over the next few weeks.

Egypt:

With ongoing clashes between security forces and Mursi supporters in various Egyptian cities as they try to disperse their 2 major sit-ins and succeeding in "Al Nahda Sq" and “Rabaa Sq” leaving hundreds injured and several dead which pushed the Egyptian market authority decided to close the market last Thursday due to the panic in the streets, adding to this the government imposed a 12 hour curfew. The EGX30 ended the week down 1.20% on lower average volumes, yet it’s worth mentioning that the market was trading higher pre the clashes, names such as TMGH, ETEL and COMI managed to gain interest.