African Thoughts: August 26, 2013

As the northern hemisphere summer and holiday period draw to a close, global markets continue to trade very thinly. Performance was rather mixed on the global stage last week with the same theme on the African continent. As per usual, we take a look at some of the best and worst performing markets from across the continent.

Mauritius:

Mauritius managed to rally for the second week in a row with the Semdex gaining 1.8%. CIM Financial Services was the main catalyst behind the move higher with the counter gaining an impressive 16.5% for the week. There was strong foreign demand in MCB as the banking giant managed to gain 1.2% to close the week at Rs193.25. SBM was also very much in demand and managed to gain 2.9% to close at Rs1.07 after posting impressive results recently. Foreign interest remained robust in Port Louis for a second week in a row as they were net buyers to the tune of $1.14m.

Zimbabwe:

The post-election carnage on the Zimbabwean market continued last week with the Industrial Index falling 2.17% while the Mining Index managed to gain 0.19%. Large cap stocks in the industrial sector continue to drag the market lower with the likes of Delta (-2.83%), Econet (-5.7%) and Seedco (-3.75%) getting no respite from the recent sell-off. In terms of activity, Delta and Econet were the most active, accounting for 20% and 18% of turnover respectively. There was however a large block of $2.9m worth of OK Zimbabwe (33% of turnover) that traded during the week with both the buyer and the seller being foreign. Inflation for July fell 0.62% to 1.25%.

Nigeria:

Trading in Lagos was once again dominated by a few select block trades as most of the week was very slow from an activity point of view. There was some crossing action in the normally very illiquid Glaxo Smith Kline on Thursday and Friday which gave the market a boost in turnover, as well as some decent activity in WAPCO and Nestle on Friday. The market came under some pressure with the ASI falling 1.11% for the week as banking stocks were the major drag on the market with the Bank 10 Index falling 1.28%. Consumer stocks also came under a bit of pressure with the Consumer Goods Index falling 0.87%. There were still some results being released last week with the likes of Guaranty Trust Bank posting H1 2013 numbers while Flour Mills released Q1 results.

Kenya:

Trading in Nairobi was very similar to Lagos as turnover was dominated by a few large blocks. BAT accounted for 30% of turnover with Friday seeing large crosses take place in the name as foreigners were involved on both sides of the counter with 2.12m shares changing hands at KES 575. BAT has breached the foreign ownership threshold in Kenya, and the only way that foreigners can now buy stock in BAT in Nairobi is by purchasing the shares from a foreign owner. Foreign demand retuned to EABL with inflows totaling $3.93m in the counter after the brewer reported FY 2013 results on Friday. Safcom reached a 12-month high (KES 8.20) last week but then succumbed to profit taking with the telco falling 1.9% to close the week at KES 7.90. Kenya Airways finally managed to find some support after the recent bout of selling and gained 5.6% to close the week at KES 9.45. From a performance point of view the market closed the week lower with the NSE 20 Index falling 0.40%. Both Access Kenya and NIC Bank released H1 2013 results.

Egypt:

After the last several days of clashes which left more than 700 dead and thousands injured, the market continued to come under pressure in Cairo with the EGX falling 2.25% for the week. Fears of further escalation were still on the rise with the EU summit on Monday attempting to gain international sympathy. Not to mention the international reaction as the U.S and Europe are mostly negative on the Egyptian scene. It’s worth mentioning that Local investors (both institutional and retail) continue to be bullish towards the market as they remain net buyers targeting names such as ESRS, TMGH and OTMT. International institutions continue to be net-sellers targeting names ETEL, ORTE and HRHO.