African Thoughts: December 03, 2012

The majority of African markets continued to be plagued by low liquidity last week as investors continue to take stock of global economic events and uncertainties. As is always the case, we take a look at some of the best and worst performing markets across the continent below.

Mauritius:

It was good to see Mauritius on the top of the pile in terms of performance with the Sem-7 gaining 1.2% to close at 326.42 while the Semdex gained 0.9% to close at 1,682.05. The move higher was driven by SBM which gained 6.0% to close the week at 88.00. The increase in SBM could be due to the fact that the AGM of the bank will be held soon and on the agenda will be the approval of the share split which will be in the ratio of 100 shares for each share held. Following a meeting held by the Monetary Policy Committee on the 26th of November the key repo rate was maintained at 4.90%.

Nigeria:

Nigeria was one of the stronger markets on the continent last week with the ASI gaining 0.7%. It must however be noted that volumes were absolutely dire and the mover higher should therefore be taken with a pinch of salt. Unfortunately in terms of news in Nigeria there was not much to report, the market was oversold from the previous week and we did see a bit of selling interest in the banks, predominantly Diamond and Access, and renewed interest in FCMB, WAPCO and NB. However we do not expect significant trade up in equities, as liquidity remains a major challenge in domestic markets.

Tanzania:

The Tanzanian market closed the week slightly higher with the DSEI gaining 0.14% to close at 1,474.59. Weekly turnover stood at Tshs.4,665 million, a +44.03% compared to the previous week’s performance where turnover was Tshs.3,239 million. Activity levels also improved slightly where 2,937,213 shares transacted during the week (+27.20%). Banking stocks strengthened further with the Index gaining 0.65% supported by CRDB’s gain (+6.38%).

Egypt:

The Egyptian market was the worst performing bourse on the continent last week and took an absolute hammering with the EGX falling 11.67%, losing its place as the world best performing index, this comes after clashes broke out between supporters and opponents of President Mohamed Mursi after he issued a decree granting himself sweeping powers. Companies listed on the benchmark index lost 22 billion pounds, or almost 10 percent of their market capitalization on Sunday. Tensions continue to rise as a large number of Egypt’s judges and prosecutors halted work and the calls for a massive riot against the president’s decree on Friday, adding to this the Muslim Brotherhood has called for a mass protest on Saturday which could result in clashes between themselves and protesters.

Tunisia:

Tunisia was another North African market that fell under the sword last week with the main index falling 4.1%. The market’s performance was a direct result from clashes between the armed police forces and angry protestors in several parts of the country such as Seliana, Beja and El Kef. People seem to be fed up with the promises in these neglected regions and the armed forces used plastic bullets resulting in serious injuries to the eyes of 18 people. The Central Bank held an executive board meeting on the 28th of November and decided to keep the key interest rate at 3.75%.

Zimbabwe:

The Zimbabwean market ended the week with both major sectors coming under pressure. A third consecutive weekly loss for the main stream industrial index saw the year to date gains narrow to 2.95% as it becomes increasingly likely that the ZSE will at best break even for the year. For the week industrials came off -1.66% to 150.16pts. Mid-week gains in mining giant RIOZIM were not enough to carry the day for the mining index that closed the week -2.39% softer at 68.74pts while on year to date basis the index has since came off 31.74% as the four constituent stocks for the index have suffered from low capital injection which has affected operations since dollarization. On the liquidity front, things were rather slow as value traded fell 27.6% to $7.1m for the week as foreigners accounted for the majority of trade.

Kenya:

The Kenyan market was fairly weak last week with the NSE 20 Index falling 2.0%. The move lower was lead by banking stocks as investors looked to take profits with KCB, Equity Bank, Barclays and NIC falling 7.5%, 3.1%, 5.5% and 3.1%. Safaricom was the week’s top mover accounting for 38% of volume buoyed by high foreign investor trading. The counter witnessed profit taking at the start of the week after CCK cut mobile termination rates by 35% to KES 1.44, then recovered towards the end to close flat at KES 5. Total Kenya edged down 3.6% w/w to KES 13.30 after posting a KES 243.6m 3Q12 loss. The Treasury forecast GDP growth of 5.1% in 2012.