African Thoughts: January 09, 2017

Nigeria:

It was an extremely slow start to 2017 in Lagos as expected with most market participants still absent, as total value traded for the week amounted to a dire $14.83m, with no decent crosses worth noting. The market started off the year on the back foot, with the ASI falling -2.32%. Consumer stocks were a major drag on the index with the sector falling -2.28% with some heavy losses in Cadbury (-7.68%), NB (-4.05%) and Guinness (-3.67%). Banking stocks also closed in negative territory with the sector closing -1.57% lower thanks to the likes of GTB (-4.70%) and ETI (-4.18%). We expect activity to increase ever so slightly this week as market participants start returning from the festive season break. We must however note that we don’t expect to see any fireworks until the FX issue is sorted out.

Kenya:

It was a fairly average start to 2017 from an activity point of view, but still the most active week that we have seen in over a month, with turnover amounting to $26m, while net foreign inflows amounted to a rather satisfactory $5.6m. Safcom (-2.9%) was the most active counter for the week thanks to a number of decent foreign crosses in the telco. There was also a decent cross in the usually illiquid KEGC (-0.9%) that helped boost activity. The market came under a fair amount of pressure with the NSE 20 Index falling -1.5%. EABL was a major drag on the market with the brewer falling -6.1%, while the two major banking stocks also took some strain with EQBNK and KNCB falling -4.2% and -3.5% respectively. On the economic front, inflation for December 2016 fell -0.33% to 6.35%. The Kenya National Bureau of Statistics announced that Q3 2016 GDP came in at +5.7%, compared to +6.0% in Q3 2015.

Zimbabwe:

It was a very slow start to the year in terms of activity in Harare with turnover amounting to a dull $1.6m, with the usual suspects Delta and Econet dominating what little activity there was. Foreigners remain sellers on the Harare bourse and were net sellers to the tune of $658k last week. On the positive side, the market managed to close slightly higher, with the Industrial Index gaining +0.57%.

Mauritius:

The market started 2017 on a negative note in Port Louis with the Semdex closing -0.29% lower. The two major banking stocks took some strain with SBMH falling -2.1% (on very thin volume) while MCBG closed -0.8% lower. Hoteliers ended the week mixed with NMH gaining +1.9%, LUX falling -0.4% and SUN closing unchanged. It was an extremely quiet week in terms of activity with total value traded amounting to $1.68m, which was further exacerbated by the fact that MCBG accounted for 69.3% of turnover.