African Thoughts: February 09, 2017

Nigeria:

In Lagos we saw the ASI drift lower by 1.79% during the week and is now down -5.71% for the year. In fact, if it wasn’t for a rebound in the Banks on Friday the index would have closed a lot lower. As it was, the banks ended the week up 45bps with the biggest story of the week coming in Access Bank with the news that the bank had divested from its 17.65% stake in the Stanbic PFA. The name rallied hard on Friday after the news (limit up) to end the week at N6.94. Consumers continue to take a pummeling as the sector ended the week down 5.72%. A number of names (eg NB and Nestle) are now trading at multi-year lows. With turnover still at historical lows, total value traded for the week amounted to a paltry $25.49m. On Friday there were notable crosses in the likes of Seplat, Mobil and Presco.

Kenya:

The bulk of the week’s focus in Africa remains in East Africa where Kenya is probably the most liquid of all markets currently. After a tough start to the year the NSE 20 gained 3.12% (YTD -7.6%) while the NASI rose by 1.01% (YTD -5.9%) for the week. There was also an increase on the activity front as turnover rose +34% to $40.36m. We saw some chunky trades going through in multiple names with foreign and local participants getting involved on both sides of the equation. Among the large caps we saw EABL and Safcom both close a bit softer at KES18.50 and KES225 respectively. Both banks had pretty strong weeks and despite some weakness on Friday, EqBnk closed higher at KES25.50 while KNCB closed up at KES27.00. According to a report done by Proctor and Gamble, retail spending in Kenya grew by 13% y/y in 2016 to $17.62bn.

Zimbabwe:

It was yet another dull week in Zimbabwe as the Industrials shed 75bps on low volumes. The index is now already down 3.56% for 2017. The loss would have been even worse if it wasn’t for a big rebound in Econet (+11.30%, 20c) albeit on not much trading volumes. The big drags on the index included Delta (-3.02%, 85.33c) and BAT (-1.64%, 1500c). Foreigners remain net sellers on the ZSE as they remain wary of getting money out of the country. In economic news, the government’s efforts to increase revenues with the introduction of a VAT on certain cereal and meat products was reversed after the Minister of Finance halted the implementation of SI20. In positive news however, the revenue authorities noted improved collections in January.

Mauritius:

In Mauritius we saw the Semdex rise by 29bps while the SEM-ASI inched higher by 17bps. YTD the 2 indices are now up 4.74% and 2.81% respectively. The week was mostly quiet and this was partly due to Thursday being a holiday - Thaipoosam Cavadee which is one of the most popular festivals celebrated by Indo-Mauritians whose ancestors originated from Tamil Nadu, India. All around Mauritius, the rituals are performed in temples which are known as kovils and characterized by their Dravidian architecture. Amidst recitation of prayers, flowers and sandalwood are offered alongside burning of camphor to implore Lord Muruga’s grace. On the market we saw MCBG clip higher by 90bps to Rs225.00 while SBMH dripped lower to Rs7.00 (-1.1%). In the hotel sector we witnessed mixed results – NMH gained 40bps to Rs12.25 while Sun fell by 3% to Rs38.70.