African Thoughts: February 10, 2014

A mixed week took place as most eyes were focused on Friday’s NFP numbers. As is always the case in African markets when important global numbers are coming out we saw a very quiet week from a foreign perspective. Yes, there was the odd cross but in general local participants dominated the markets.

Zimbabwe:

The Industrials Index gained a solid 1.72% for the week thereby arresting the recent softness (index still down 4.75% YTD). Delta was the toast of Harare as the brewer gained 7% to 127c while other large caps like Econet and BATZ gained 1.67% (61c) and 1.48% (1370c) respectively. The only large cap that fell was Old Mutual which fell by 1.68% to 241c. However, market turnover remains on the light side with foreign investors mostly quiet although foreign investors were notably skewed to the buy side for a change.

Nigeria:

The Nigerian ASI had a marginally positive week (+50bps) as they were led higher by gains in large caps like Dangote Cement (+2.35%) and Nestle (+1.33%). There were also impressive gains in smaller names like Forte Oil (+13.3%), Beta Glass (+19.17%) and Oando (+13.94%, after the news that Oando has secured financing for the acquisition of ConocoPhillips’ Nigerian assets). Banks were aggressively sold as they shed 6.9% while consumers lost 3.69% for the week. Most Tier 1 banks closed in the red. Wapco was also on the back foot for most of the week and ended losing 5.2%

Kenya:

After 2 consecutive weeks of net foreign outflows we saw foreign investors turn net buyers. However, large block trades in Diamond Trust Bank skewed these stats as foreign investors were quiet in normal trading. The Nairobi bourse remains soft though as the NSE 20 lost 50bps while overall turnover fell despite the improvement in foreign participation. Notable risers for the week included Safcom (+7.7%, KES 11.85) while the banks were in demand (DTKB +2.3%, CFC +8.1%). The large banks also rose with KNCB rising by 1.2% to KES 43.75 and Equity Bank rising by 2.4% to KES 31.75. EABL ended the week unchanged at KES 259. Barclays kicked off the banks’ earnings season which saw them report a disappointing 12.8% decrease in PAT.

Mauritius:

A small cyclone (Edilson) passed the Indian Ocean last week which meant that Thursday the market was closed. Despite this the Semdex saw some strong buying interest after a couple of tough weeks. MCB rose to Rs208 while SBM rose to Rs1.05 thereby reversing the recent weakness in the sector. Hotels went the other way as we saw losses in NMHL (-5.4%), Sun (-3.1%) and Lux (-70bps). In economic news, the MPC voted to keep the repo rate unchanged at 4.65%.

Francophone Region:

Despite a small dip in the index last week the BRVM Comp is still up 6.67% YTD while the BRVM 10 is up an impressive 8%. Sonatel fell off marginally by 83bps for the week but is still very strong as lots of demand abounds.