African Thoughts: August 31, 2015


The market struggled in Lagos last week amidst all the global turmoil, but we did however see a bounce towards the end of the week, trimming the losses across the major sectors with the ASI closing -3.56% lower taking the YTD loss to -16.86%. Consumers were the hardest hit with the sector falling -6.22% with the likes of PZ Cussons (-26.55%) and Nestle (-14.26%) amongst the worst performers. The banking sector was also weak with the sector falling -3.24% with ETI (-5.31%) and GTB (-1.23%) dragging the sector lower. In times of global market turmoil we often see liquidity dry up in African markets, and last week was no exception as total value traded fell -13.04% to $87.89m with Zenith Bank, UBA and Access being the most active. GTB released H1 numbers which saw PBT increase +18%. Dangote Cement announced plans for a total capacity expansion across Africa worth approximately $4.34bn.


The Kenyan market was not spared in the chaos that unfolded around the globe last week with the NSE 20 Index falling -6.9% taking the YTD loss to -19.8%. Activity also suffered with turnover falling -49.5% to $36m as foreigners accounted for 75.3% of total value traded and were net buyers to the tune of $3.9m. Safcom (-5.7%) was the week's most active counter as the telco plans to introduce charges for the transfer of funds from customer's bank accounts to third party M-Pesa clients as well as sending money to multiple M-Pesa customers. BMBC had a good week from an activity point of view and managed to close +0.7% higher. The two major banking stocks came under some serious pressure with KNCB falling -4.3% while EQBNK closed -3.8% lower. Britam was one of the biggest losers after reporting disappointing H1 results.


The market continues to struggle in Harare as foreigners remain all-but absent with the Indsutrial Index falling -0.35%. Activity also dropped off (-51.90%) from the prior week with total value traded amounting to $3.02m. It was the usual heavy weights (Econet (29%) and Delta (28%) that drove proceedings while there was some action in Old Mutual (11%), CBZ (11%) and Innscor (5%). President Robert Mugabe made his state of the nation address last week, in which he outlined a ten point plan to maintain economic growth and create jobs anchored on the agriculture sector.


The market closed the week lower in Port Louis with the Semdex falling -1.6% while activity was rather sluggish with turnover amounting to $5.7m with MCBG, NMH and SBMH accounting for 64% of total value traded. The two major banking stocks closed the week lower with MCBG falling -2.7% while SBMH fell -2.3%. Hotelier NMH also closed the week lower with the counter falling -0.8%.

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