African Thoughts: January 23, 2017


Nigeria:

It was another extremely dull week in Lagos from an activity point of view with turnover increasing +1.39% to $29.09, as the market has not exactly set the world alight in 2017 just yet. There were a few crosses in the usual market heavyweights, but nothing worth writing home about. The market closed the week lower, with the ASI falling -0.39%, taking the YTD loss to -2.42% already. Consumers were the major drag on the market with the sector falling -2.08% as weakness in Guinness (-8.24%), Nestle (-5.70%), Unilever (-4.29%) and 7UP (-4.19%) weighed heavily on the sector. On the positive side, banking stocks managed to close the week higher with the sector gaining +1.80% thanks to gains in Access (+4.63%), UBA (+3.81%), Stanbic (+3.74%), ETI (+2.88%) and Zenith (+2.76%). On the news front, the IMF forecast that Nigeria would recover from the latest recession, projecting that the economy would grow by 0.8% in 2017 and 2.3% in 2018. Speaking at the World Economic Forum on Wednesday, Vice-President Yemi Osinbajo Osinbajo said the government is in talks with the CBN to fully implement the “free-float” foreign exchange policy, but it cannot put a time on the “logical conclusion” of the talks.

Kenya:

The market continues to struggle in Nairobi with the NSE 20 extending this year’s losses and falling -1.5%, taking the YTD loss to -8.5% already. The NSE 20 Index is now down an astonishing -40% over the last 2 years. Activity ticked up slightly by +6.5% to $28.6m, but remains well below par. Net foreign inflows decline for the third straight week to $829k. To compound matters even further Safcom (+1.1%) and EABL (+3.3%) together accounted for 65.4% of the weekly activity, making activity feel even more sluggish than what it actually was. Latest data out from the Communications Authority of Kenya showed that Safcom had increased subscribers by 669k, equating to a market share of 68.9%. EABL is due to release H1 2017 results on Friday the 27th of January. Nothing much to report on the two major banking stocks as activity remains very muted in the names.

Zimbabwe:

Activity picked up last week in Harare with turnover increasing +35.63% to $2.1m, as proceedings continue to be dominated by local investors. The main drivers behind activity were Innscor (30%), Econet (26%) and Delta (20%). The market closed the week slightly lower, with the Industrial Index falling -0.79% (YTD +0.37%). Econet (-10.15%) came under some serious pressure after releasing a cautionary with details pertaining to a rights and debenture issue. Delta (-0.54%) was also a drag on the market after releasing a rather downbeat trading update.

Mauritius:

The market continued to nudge higher in Port Louis with the Semdex gaining +1.31%, taking the YTD gain to +1.94%. Banking stocks performed well with SBMH closing the week +2.1% higher on low volume, while MCBG managed to close +1.4% higher. NMH closed +2.4% higher after ENL Land and Rogers jointly acquired and additional stake in the hotelier, taking their joint shareholding to 30.019%. It was a rather average week on the activity front with turnover amounting to $5.29m as MCBG, CIEL and NMH accounted for 72.1% of total value traded.

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