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African Thoughts: January 25, 2016


It was an extremely slow week in terms of activity in Lagos as turnover fell -23% to $53.9m with a few crosses in the likes of NB, GTB and Zenith driving proceedings. On the positive side, there seemed to be some bottom picking in banking stocks with the sector gaining a rather impressive +9.45% with strong gains in FBNH (+25%), Zenith (+19.7%), UBA (+15%) and GTB (+14.88%). It should however be noted that we did see some selling return towards the end of the week. Consumers also managed to close the week higher with the sector gaining +1.98% thanks to the likes of NB (+11.46%) and Cadbury (+4.44%). The National Bureau of Statistics released inflation figures for December which saw CPI increase from 9.4% to 9.6%. The Central Bank of Nigeria announced that they will no longer hold Dollar auctions on a daily basis.


The market came under a bit of pressure in Nairobi last week with the NSE 20 Index falling -2.4% as foreign investor turned net sellers for the first time this year and recorded net outflows of $408k. Foreigners continued to dominate proceedings and accounted for 74.7% of activity. EABL and Safcom were the most active counters for the week and together accounted for 40.7% of total activity. Both counters came under a bit of pressure with EABL falling -3.8% while Safcom fell -6.2%, both on foreign selling. KNCB continues to see net foreign outflows (12 consecutive weeks) and touched a 52 week low of KES 37.00. The Monetary Policy Committee retained the Central Bank Rate at 11.5%.


The Harare bourse has started 2016 exactly how it ended 2015 with the Industrial Index falling -5.95% last week, taking the YTD loss to -9.99% already. Delta was amongst the biggest losers, falling -14.24% after releasing a disappointing third quarter trading update. OK Zim (-16.67%) and Innscor (-14.58%) were also amongst the worst performers for the week. Activity also continues to disappoint with turnover falling -19.15% to $2.1m with some activity in Delta (33%) and Econet (27%).


The market closed the week slightly lower in Port Louis last week with the Semdex falling -0.2% as SBMH was a massive drag on the market and fell -7.1% on foreign selling while MCBG managed to close +0.4% higher. Hoteliers ended the week mixed with NMH gaining +0.8% while LUX fell -1.7%. It was a very quiet week from an activity point of view as total value traded amounted to $4m as foreigners were net sellers.

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