African Thoughts: February 29, 2016


It was another pathetic week in Lagos, both in terms of market performance as well as trading volumes. Foreign investors are particularly quiet although local participants have also been quieter than normal. The ASI fell by a further 83bps last week and is now down a damning 15.51% already for 2016. The banks (-2.45%) were the main drag on the index and this was mostly due to a profit announcement by FBNH on Wednesday. There were also losses for Diamond Bank (N1.36, -12.26%), Skye Bank (N0.97, -10.19%), FCMB (N0.97, -9.20%) and GTBank (N15.90, -5.75%). The Consumers rose by 88bps with gains on the likes of Unilever (N29.00, +3.65%), NB (N101.77, +1.78%) and Nestle (N715.00, +2.14%). Other top gainers in the week were Seplat (N340.00, +12.40%), Lafarge WAPCO (N84.52, +5.65%) and GSK (N24.98, +3.35%).


The NSE-20 (+1%) and the NASI (+40bps) both closed marginally positive but are still down 4.2% and 3.1% YTD respectively. Equity turnover was also at ridiculously low levels as foreign investors remain skewed to the sell side as well as being largely absent. Large cap performance was very mixed as we saw falls in Equity Bank (-1.9%, KES39.00) and EABL (-5.0%, KES268) while there were small gains for KNCB (+1.3%, KES40.00) and Safcom (+1.6%, KES16.10).


The Industrials finally had a positive week (+49bps) although the YTD figure is still 13.45% in the red while volumes remain woefully low. The rise in the index was thanks to gains in Econet (+4.31%, 23c) and Delta (+2.40%, 53.25c). Also on the positive side we saw CBZ release results FY15) which showed a 19% rise in income and a 6.7% increase in PAT.


Both the Semdex and the Sem-10 fell by 1.2% last week and are now both trading in the red for 2016. Trading activity was however very muted especially outside of some crosses in the normally very illiquid Rockcastle. In thin normal trading we saw MCBG fall marginally to Rs206.25 (-10bps) while SBMH closed unchanged at Rs0.67. NMH was the big loser as the hotel stock fell by 8.5% to Rs21.00.

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