African Thoughts: January 20, 2014

Global markets were broadly unchanged last week while African markets were mixed across the Board after a stellar 2013 for most markets.

Zimbabwe:

Activity remains generally upbeat in Harare although the Industrials still fell by 62bps. The 2 biggest stocks were the core reason for the softness as we saw Econet fall by 2.38% to 61.5c and Delta lose 2.12% to 138.99c. On Friday morning Delta announced their Q3 trading update (Dec13) which showed total beverage volumes flat compared to the same period in the previous year. Foreign investors were net sellers for the week.

Nigeria:

The NSE ASI gained 65bps last week on the back of strong demand in the banks (+9.78%) and consumers (+3.37%). Turnover was vastly improved although this was skewed somewhat by a couple of chunky crosses in the likes of Oando and Wapco which are normally fairly quiet names with local participants dominating these. Tier 1 banks were the main drivers and some of the top gainers included Zenith Bank (+8.23%, N25.11) and FBNH (+4.21%, N16.10). Consumers were led higher by UACN which gained 4.48% to N70.00. Dangote Cement announced plans to complete 5 new plants in Africa during 2014. In economic news, the National Bureau of Statistics released marginally higher CPI at 8% for the month of December 2013.

Kenya:

The NSE 20 gave back some of the previous week’s gains as the index fell by 80bps as foreign participation continues to fall (41% vs 52% in the previous week). There was no surprise in the most actively traded stocks which all saw week-on-week softness on the back of an absence of foreign buying. The 2 most active stocks were Safcom which shed 2.1% to KES 11.50 and EABL which lost 3.3% to KES 289. The banks also had a tough week and we saw Equity Bank (-3%, KES 32.25) and KNCB (-3.7%, KES 45.75) both falling. In economic news the MPC announced an unchanged benchmark interest rate of 8.5%.

Botswana:

The DCI gained 77bps last week which was mostly on the back of an 18t increase in Choppies to 364t, albeit on tiny volumes. In general, it was an extremely quiet week with just the 1 cross in Letshego (236t) taking place.