African Thoughts: July 10, 2017


The ASI had a rather uninspiring week last week as the index fell by 1.99% on relatively weak volumes. Both the banking (-2.22%) and consumer (-4.03%) sectors had poor weeks. In the banks, ETI (N12.39, -11.31%) led the losers chart, supported by Stanbic (N31.50, -4.55%), Fidelity Bank (N1.26, -3.82%), UBA (N8.50, -2.97%), Diamond Bank (N1.21, -2.42%), Access (N9.13, -1.83%), Zenith Bank (N20.60, -1.39%), FCMB (N1.24, -0.80%) and Guaranty (N34.60, -0.63%). The biggest losers in the consumers included Flourmill (N22.78, -15.63%), Guinness (N62.00, -13.29%), Cadbury (N12.50, -10.71%), PZ (N21.00, -8.38%), Unilever (N34.00, -7.78%), Presco (N67.93, -6.95%), 7up (N82.00, -5.15%), NB (N154.00, -4.35%).


The NSE20 closed the week down 9bps with turnover doubling from the previous week. However, this should be taken with a pinch of salt as there was one massive local-local cross in Equity Bank which heavily aided total market turnover. Equity Bank ended the week down 1.32% at KES37.25 but in normal trading we saw Safcom once again heavily dominate daily trading as the telco rose by 1.10% to KES23.00. Most other counters were eerily quiet.


The Industrials rose by 1.00% last week and the index is now up a very impressive 36.95% YTD. As has been the case recently though, local investors are still the major reason for this outperformance as they continue to aggressively push stocks higher. There were gains in the likes of Seedco (+3.57%, 145c) and Econet (+1.78%, 36c).


The Semdex ticked higher by 60bps last week. As usual, turnover was heavily skewed towards the financial stocks like MCBG which actually experienced a down week (-70bps, Rs270.00) for what feels like the first time in months. Meanwhile, SBMH rose by 60bps to Rs7.28.

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