African Thoughts: February 06, 2017

Nigeria:

Nigeria had yet another woefully dull week as foreign investors remain extremely cautious in light of the FX instability and uncertainty. Activity fell by -59.26% to a dire $25.12m with no crosses worth noting. As a result, the ASI fell by -1.61% on the back of thin volumes across the board with most names just drifting lower down thanks to a lack of interest. Banks dropped by -2.71% with losses in GTB (-5.46%) and Zenith (-2.75%). Consumers got hammered by a disappointing -5.48% thanks to heavy losses in Nestle (-9.33%) and NB (-6.28%).

Kenya:

The Kenyan market posted their highest weekly gains for the year with the NSE 20 rising by 1.6% although it is still down 6.9% YTD. The highlight of the week from an activity point of view was some chunky action in Safcom (+1.4%, KES18.65) on Wednesday as a total of 60.4m shares changed hands in the telco. EABL had a solid week from a performance point of view on average volume after releasing H1 2017 numbers which were in-line with market expectations. The brewer closed the week +5.02% higher at KES230.00. Both major banking stocks closed the week higher after the Kenyan Central Bank kept the benchmark rate at 10%, with EQBNK gaining +2.04% (KES25.00) while KNCB gained +1.04% to close at KES24.25). Foreign investors remain as net buyers for the fifth straight week. In economic news, January 2017 headline inflation came out showing 6.99% which is an increase from 6.35% in December. The main driver of this, as expected, was food inflation.

Zimbabwe:

It was a dull week in Zimbabwe on the activity front as the lack of interest from foreign investors continues to permeate throughout the market. The market continues to drip lower, with the Industrial Index closing 50bps lower for the week which now drags the index down 2.83% for 2017 thus far. Among the large caps to fall we saw Delta slide by 2.22% to 88c after announcing lackluster Q3 trading update. Econet continues to fall after the spat with the ZSE Board over the proposed rights offer although the heavy fall was somewhat arrested with the telco dropping by 5.55% to 17c albeit on generally low volumes. On the news front, the Reserve Bank of Zimbabwe and Econet have put up a facility to allow local shareholders to participate in the rights issue.

Mauritius:

In Mauritius both the Semdex (+57bps) and Sem-ASI (+35bps) closed higher for the week and are now up 4.43% and 2.64 for the year respectively. We saw mixed performance by the banks with MCBG closing slightly higher while SBMH slid by 2.2%. The hotel sector also ticked slightly higher mostly thanks to Sun Resorts which rose by 5.0% to Rs39.90. Turnover was heavily focused on MCBG and Ciel with Ciel in particular enjoying some heavy foreign selling.