African Thoughts: December 02, 2013

Nigeria:

The market ended the week lower in Lagos with the ASI falling 0.83% to close at 38,920.85. A number of blue chip counters dragged the market lower with the likes of WAPCO (-9.75%), First Bank (-3.19%) and Nigerian Breweries (-1.14%) all being amongst the worst performers. There were a few good performances with the likes of Nestle (+4.13%), Access Bank (+2.88%) and Guaranty Trust Bank (+1.87%) all closing the week on the front foot. Things were rather robust from an activity point of view at the beginning of the week but then began to slow down thanks to the U.S Thanks Giving holiday with turnover falling 34% (w-o-w) to N18.9bn. Zenith Bank and Transcorp were the top traded stocks (by value) trading N2.65bn and N2.22bn respectively. Nigeria Breweries disclosed plans to commission an ultra-modern ‘can line’ at its Aba brewery plant. The can line is one of the projects being executed in the ongoing expansion of the plant, which is expected to scale up the production capacity of the plant from 1.2 million hectolitres (HL) to 2.4 HL per annum in 2014.

Kenya:

The NSE managed to close the week higher with the NSE 20 Index gaining 0.9% to close at 5,100.88. We did however start to witness some form of profit taking towards the end of the week, albeit on thin volumes with foreign participation falling to 41.2%. Safcom was once again the market’s most active stock and accounted for 26% of volumes with the telco reaching a new all-time high of KES 11.20. Of the top movers CFC Stanbic witnessed the highest gains, climbing 4.8% w/w to a new year high of KES 87 after posting strong Q3 2013 earnings. Kenya Commercial Bank witnessed some softness, easing 2% to KES 48 on mild profit taking. Inflation for the month of November fell for the second consecutive month to 7.36% from 7.76% in October and 8.29% in September. Safaricom has acquired the full shareholding of rival Essar (10%) in the undersea fibre optic The East Africa Marine system (TEAMs) for an undisclosed fee. After a two-year delay, the expansion of the Jomo Kenyatta International Airport (JKIA) will commence as the president breaks ground for the new terminal which will increase passenger capacity to 20m to keep pace with a projected annual passenger traffic growth of 12%.

Zimbabwe:

The market came under some pressure in Harare last week with the Industrial Index falling 1.83% to close at 213.04 with the likes of OK Zimbabwe (-16.67%), Econet (-0.48%) and Delta (-0.67%) dragging the market lower. On the positive side, foreign inflows increased 126.57% to $7.32m showing interest in market heavyweights Econet, Delta, CBZ and SeedCo. The increase in foreign activity saw turnover for the week increase to $9.46m. A highlight for the week was the announcement of the suspension of the memorandum of understanding between the central bank and the local banks which should ease pressure on margins for the local banking institutions.

Mauritius:

The market ended the week lower in Port Louis with the Semdex falling 0.32% to close at 2,031.87. Banking stocks ended the week mixed with MCB falling 0.12% while SBM closed unchanged. It must however be noted that MCB went ex-div on Friday. The hotel sector came under pressure last week with NMH falling 4.1% while Sun Resorts fell 0.30%. Most of the activity for the week was centered on Rogers (40%) and MCB (38%).

Egypt:

The market witnessed a strong correction last week leaving the EGX30 to end the week down 3.91% to close at 6184.11, while activity remained rather average. The market finally saw the long-awaited profit taking, with institutional investors (international, GCC, and local) pushing the market lower. COMI was the biggest decliner, witnessing very strong selling pressure on almost five times its 30-day average turnover; it is worth mentioning that COMI announced the dates of its EGP3.0 billion capital increase to EGP9.0 billion, carried out through a 1:2 stock dividend. The main reason behind the sell-off was growing fears of protests over the weekend against the new protest law where several cities in Egypt witnessed defiance against the protest law.