African Thoughts: February 14, 2012

With developed markets taking a bit of a breather last week, African markets ended the week mixed with some stellar performances, namely Egypt gaining 6.7% while the likes of Zambia came under a fair amount of pressure. Below is a list of the best and worst performing markets across the African continent from last week.

As mentioned above Egypt was the best performing market with the EGX 30 gaining 6.7%. The gains can largely be attributed to France Telecom engaging in talks with Orascom Telecom to buy part of their stake in MobiNil and Egyptian Company for Mobile Services. Local investors have also been buying equities to seek refuge ahead of the expected devaluation of the Egyptian Pound.

Ghana:

Ghana managed to close the week in positive territory with the GSE-Composite Index gaining 0.6%. The move higher was driven by Benso Oil Palm Plantation after reporting impressive full year results, the name rallied from 1.51 Cedi to close the week at 1.77 Cedi. Total and Standard Chartered also performed well on the back of anticipated dividend payments.

Kenya:

Kenya ended the week lower with the NSE 20 Index falling 1.1%. On the positive side, volumes increased by 54% with the likes of Safcom, KCB, Equity Bank and EABL being the biggest contributors towards value traded. There was strong foreign interest in Safcom and EABL with the latter expected to release half year results relatively soon. BAT and Bamburi are expected to release full year results quite soon as well.

Malawi:

Malawi was another week performer with the market falling 2.1% on the back of TNM coming under a fair amount of pressure. The name has come under the whip ever since the plug was pulled on negotiations with a strategic equity partner.

Mauritius:

Mauritius ended the week flat with the Semdex closing unchanged at 1,832.83. Foreigners were net buyers to the tune of $2.48 with interest largely in Vivo Energy Mauritius. The two major banking stocks ended the week mixed with MCB closing lower at Rs165.00 while SBM gained 0.60% to close the week at Rs78.50.

Nigeria:

With a few disappointing results last week the Nigerian ASI ended the week lower by 1.2%. Both Guinness and Flour Mills reported rather unimpressive numbers with Guinness ending the week flat while Flour Mills fell 1.6%. Another drag on the Index was UBA announcing a profit warning, with the name falling 9.5% to close at 1.81 (on rather large volume as well).

Zambia:

Zambia was the worst performer on the continent last week with the LuSE falling 3.8%. The move lower was largely attributed to heavy weights Zanaco and Zambeef which fell 17.04% and 11.86%. Zanaco came under pressure as a result of investigations into the company’s privatization while Zambeef’s fall was due to the ZRA’s assessment that the company had to pay Zamanita prior taxes.

Zimbabwe:

The Zimbabwean market ended the week rather strong with the Industrial Index gaining 2.5% while the Mining Index gained 0.7%. Volume also picked by 90% to $8.9m thanks to large blocks done in the likes of Econet and Delta, with foreigners accounting for a large portion. The following news article has been released recently: Econet disposed of its 19% stake in AFRE Corporation. AFRE has been rocked into crisis after one of the major shareholders was involved in fraudulent deals at Renaissance Merchant Bank. Econet wants to protect its image, and says they want to concentrate on CORE business having also sold their stake in RTG last year.