African Thoughts: February 17, 2014


Last week was overall rather dull in the African space with foreign investors much quieter than usual. Volumes were not too disappointing though as local crosses dominated turnover. Of the micro stories that got the headlines the most notable was the story that the Nigerian MPC may increase the CRR for public sector funds to 100%. More on this below.

Zimbabwe:

The Industrials slid a further 1.83% last week extending its poor run for 2014 as the ZSE is now down 6.5% YTD. More alarmingly is the general lack of interest in the ZSE from both local and foreign investors as volumes dry up almost totally. The most excitement last week was a chunky trade in Dairibord (both sides foreign) at 15c. of the large caps, Delta and OK Zim lost 3.1% and 2.5% to 123.01c and 9.5c respectively while Econet remains stable at around the 62c level.

Nigeria:

The Nigerian ASI fell by 4.92% for the week as all sectors closed in the red. A story out that the MPC plans to raise the public sector CRR to 100% started the massive sell off as the banks lost almost 10% for the week, Tier 1 banks in particular taking a hammering. The weakness then fed through into the other sectors and we saw Consumers lose 4.9%, Insurance lose 5.2% and Oil and Gas lose 7%. Some of the large cap names that fell included Oando (-16.6%), UBA (-13.3%), Fidelity (-12.2%), DangCem (-2.2%) and Nestle (-3.5%). NB fell by 7.8% after releasing FY13 results. In economic news the CPI figures for Jan were released showing an unchanged 8% from Dec 13.

Kenya:

For the first time in weeks we saw the NSE tick higher as both the NASI (+30bps) and the NSE 20 (+10bps) closed higher. Market activity mirrors other African markets as volumes are generally muted with local investors dominating the landscape. Foreign participants remain skewed to the sell side as they have for the entire 2014. EABL released their results just before Friday’s session which showed a 5.2% increase in 1H14 EPS – the market continues to sell the name and the brewer ended the week down 6.2% at KES 243. Buyers returned to the main banks as we saw Equity Bank rise 3.9% to KES 33.00 and KNCB increase by 4.6% to KES 45.75 while Safaricom ended the week marginally weaker at KES 11.80. ARM rose by 3.4% to KES 90 on the back of news of planned new capacity investments.

Mauritius:

The Sem-7 rose by 1.2% mostly on the back of strong buying in the banks. MCB and SBM rose by 2.2% and 1.9% to Rs212.50 and Rs1.07 respectively. Smaller cap Bramer Banking was the best performer for the week as it rallied by 8.3% to Rs7.80.

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