African Thoughts: February 01, 2016


Nigeria:

The banks (+5.11%) tried their best to recoup some of the losses from earlier in January. However, despite the banking stocks' rallying we only saw the ASI inch higher by 38bps with Consumers falling by 44bps. The Banks were driven higher thanks to Zenith Bank (N12.61, +11.59%) and GTB (N16.79, +9.31%). The Consumers were hit due to a loss in NB (N100.01, -7.40%), while the likes of Nestle (N739.99, +4.64%), Cadbury (N19.00, +36.79%), Guinness (N115.50, +13.40%), NASCON (N7.02, +10.03%) and Dangote Sugar (N6.05, +9.80%) closed higher. In economic news, the Monetary Policy Committee (MPC) retained the headline interest rate at 11% while holding bank reserve requirements at 2%. It retained an asymmetric corridor of plus two per cent and minus seven per cent around the Monetary Policy Rate (MPR). We also witnessed the beginning of the results season with the likes of Forte Oil, 7Up and Intbrew releasing results.

Kenya:

The Kenyan market inched higher with the NSE 20 gaining 20bps while the NASI rose by 70bps. Turnover was also vastly higher thanks to some crosses in KNCB and EABL. KNCB saw a chunky local cross early in the week as the bank fell by 60bps to KES38.25 by the end of the week. Equity Bank closed the week unchanged at KES38.50 while both EABL (+3.9%, KES265) and Safcom (+30bps, KES15.15) were strong. EABL announced positive 2016 H1 results on Thursday which was the primary driver of the brewer's outperformance. EABL will also hold an analyst briefing and conference call on Tuesday 2 Feb.

Zimbabwe:

The Industrials fell by 33bps last week and are now already down more than 10% YTD with demand lacking across the board. Among the major caps we saw losses in Delta (-3.71%, 52.89c) and Old Mutual (-5.99%, $1.6999) while Econet was one of the rare shining lights as it gained 17.49% to 22.97%. Innscor also closed in the green at 20.7c (+98bps).

Mauritius:

The Semdex rose by 1.9% while the Sem-10 rose by a more impressive 2.5%. Both major banking groups were strong with MCBG rising by 70bps to Rs206.25 while SBMH closed at Rs0.66 (+1.5%). However, the 2 main stories for the week were IBL and NMH. IBL climbed an amazing 18.2% to Rs131.25 (story that it is to amalgamate with its parent GML) while NMH rose by 16.5% to Rs23.00 after the press article stating that an international group was interested in taking over NMH.

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