African Thoughts: January 23, 2012

With global risk appetite returning to markets last week, there were some good performances in some of the bigger bourses on the African continent.

Botswana:

Botswana ended the week rather flat with the market falling 0.3%, largely as a result of the fall in Letshego (-5.33%). There seems to be quite a bit of interest in the Choppies IPO, with preliminary results showing that it has been oversubscribed by more than 400%, the counter is set to list on the 26th of January.

Egypt:

With the third round of elections ending in Egypt and the risk of major confrontation between protestors and the SCAF starting to decrease the EGX 30 managed to gain 2.1% and was one of the best performers for the week. Moreover, the IMF went to Egypt to discuss a possible USD 3.2bn loan.

Mauritius:

Mauritius ended the week in negative territory with the Semdex and Sem-7 falling 1.1% and 0.9% respectively. With the continued weakness of the EUR against the Rupee hotel stocks continued to fall, Sun Resorts fell 6.1% while NMH fell 3.8%. According to Bloomberg, the Central Bank is planning to increase competition by potentially granting more banking licenses. Needless to say this had a negative impact on banking stocks with the likes of SBM and MCB falling 3.0% and 0.6% respectively.

Namibia:

Namibia and South Africa were the best performers, gaining 2.8% and 2.4% respectively. One must bear in mind that Namibia tracks South Africa exceptionally closely (almost tick for tick). South Africa, which mirrors developed markets the closest out of all the African markets, was definitely the benefactor of the global rally, with all the major Indices enjoying good gains.

Zambia:

Zambia was the worst performing market in Africa with the LuSE falling 1.3%. Zanco, with a market capitalization of 8.5% was one of the major contributors to the move lower with the counter falling 10.75%. Zambia Sugar was another large cap that ended the week in negative territory, falling 2.14%. Other than rumours about President Sata being assassinated, there was not much on the news front in Zambia.

Zimbabwe:

The Zimbabwean market ended the week lower with the Industrial Index and the Mining Index falling 0.17% and 2.34% respectively. Econet came under a fair amount of pressure, falling 6.25% for the week. Bindura (-33%) and RioZim (-14.31%) were the biggest contributors towards the Mining Sectors decline. Inflation for December rose to 4.9% according to the Zimbabwean National Statistics Agency.