African Thoughts: August 29, 2016

Nigeria:

It was a better week in terms of activity, but still far behind historical norms, with turnover increasing +17.12% to $43.93m with no real crosses worth mentioning. The market closed in negative territory with the ASI falling -0.72% as market heavyweight DangCem (-5.19%) was the major drag on the index for the week. Banking stocks managed to close the week higher with the sector gaining +0.86% thanks to GTB (+4.12%) and UBA (+1.83%). Consumers (+0.93%) also managed to close in positive territory thanks to gains in Unilever (+3.03%), UACN (+3.02%), Flour Mills (+2.09%) and NB (+1.48%). The Central Bank barred nine deposit taking banks from the foreign exchange market for failing to remit the sum of $2.33bn belonging to the Nigerian National Petroleum Corporation to the Treasury Single Account. The sanction will remain until the funds have been remitted to the CBN. Unfortunately we expect another rather slow week in Lagos.

Kenya:

All the focus was on banking stocks last week after the “shock” announcement that the president had passed a bill that would cap interest rates on what banks can charge, and as such, banking stocks took quite a beating with most names trading limit down on the days that followed, with more than $1bn being wiped off the market cap on Thursday alone. As always, the devil is however in the details and we will wait with bated breath until these are announced. The broader market also came under some serious pressure after the announcement with the NSE 20 index closing the week -7.1% lower with Co-op Bank (-23.4%), EQBNK (-21.9%), NIC Bank (-21.3%) and KNCB (-16.9%) all taking an absolute beating. It was a very dull week from an activity point of view with turnover falling -30% to $26.3m as foreign participation fell to 57.9%. Safcom was the only name worth mentioning from an activity point of view as the telco accounted for 41% of total value traded.

Zimbabwe:

It was a rather uneventful week from a performance point of view in Harare with the Industrial index closing +0.07% higher, trimming the YTD loss to -12.71% with some mixed performances in the bigger names as Barlcays (+5.88%) and Old Mutual (+3.31%) closed higher, Delta fell -0.75% while Econet, NatFoods and BAT closed the week unchanged. It was a completely woeful week from an activity point of view as turnover amounted to a paltry $723k for the entire week.

Mauritius:

The market managed to close the week in positive territory with the Semdex closing +0.44% higher, which in turn took the market into positive territory for the year (YTD +0.40%). Both major banking stocks closed the week flat with MCBG and SBMH closing unchanged. Hoteliers ended the week mixed with LUX and SUN gaining +0.4% and +0.3% respectively while NMH closed -0.2% lower. It was a rather average week from an activity point of view as turnover amounted to $7.32m with most of the action taking place in MCBG, Greenbay and Mainland Real Estate, which together accounted for 73.5% of total value traded.