African Thoughts: July 22, 2013

In general our African universe was on the quiet side last week as seasonality and the northern hemisphere summer season impacts market activity. Despite this, many participants remain active. Please see below for a summary of some of the markets.

Zimbabwe:

The Zimbabwe Industrials gained 1.4% last week as the index once again reaches record levels ahead of next week’s elections. The index gained despite losses in Delta and Econet. The names that outperformed were Innscor (+12.3%, 110.01c), OK Zim (+3.2%, 27.87c), BAT (+7.8%, 1,402c) and National Foods (+4.3%, 240c) – these 4 names count for 26% of the index. Foreign and local demand remains strong which shows confidence in the market ahead of the elections. Volumes for the week were pretty chunky buoyed by special bargains in Afdis, Astra and National Foods.

Nigeria:

Crosses in the very illiquid Transcorp and ABC Transport accounted for 60% of an otherwise pretty dull week in Lagos. The ASI did rise by 2.5% for the week and as such was the weekly best performer across the continent. Demand for the liquid Tier 1 banks and top consumer stocks still remains strong. Banks grew by 1.27% while consumers grew by 4.72% for the week. The top gainer in these sectors was PZ Cussons which rose by an impressive 23.22% for the week. Last week also saw the beginning of results season with NB and Unilever the two highest profile names to release. The results are due to continue coming out in the next couple of weeks

Botswana:

The Gaborone DCI ticked up by a mere 3bps last week as the bourse remained stable while witnessing a couple of crosses throughout the week. In economic news, the June CPI lost 30bps on May’s figures to record a level of 5.8%, within the 3-6% target range.

Egyt:

The market maintained its bullish momentum again to witness a decent gain lead by notable buying from local retail and local institutional investors leaving the EGX30 to end the week up +1.32%. The market also traded decent volumes relative to average turnovers. The euphoria invaded the market last week as it was clearly evident after the government announced the timeline for the current period in regards to parliamentary election, constitution and the presidential election (which was much shorter than expected). Adding to this was the appointment of "Beblawi" as the New PM and Baradei is acting as VP which is looking positive on Egypt's economic and foreign affairs, as well as the UAE and KSA already pledging aid to Egypt. Local investors were aggressive buyers in the market targeting names such as ORTE, PHDC, HRHO and OTMT, yet international institutions remain as net-sellers in particular in names such as OCIC and COMI.

Kenya:

The Nairobi NES 20 index grew by 1.8% for last week to a 1 month high with gains on the large caps the main driving force. Foreign investor inflows rose by 27% from the previous week with Safcom and EABL the 2 stocks most attractive to foreigners. Safcom gained 2.4% for the week and touched a 2013 high of KES7.40 during the week yet settled at KES7.25. After the recent weakness, EABL continues to tick up higher and eventually settled up 1.2% at KES 348. Banks were mixed as Equity Bank lost 70bps to KES 33.50 while KNCB rose by 3.7% to KES 42.00.

Mauritius:

Turnover was low in Port Louis last week yet both the Semdex (+10bps) and the Sem-7 (+60bps) performed well. In the Sem-7, foreign buying in MCB drove the stock higher to close at Rs186 while SBM remained unchanged at Rs1.02. A small gain in Terra of 20bps also pushed the Sem-7 higher. The hotel sector was mixed at NMH and Sun Resorts lost 40bps and 1.1% respectively while Lux Island Resorts gained 1.9% to Rs22.

Francophone Region:

The composite market lost small ground last week – despite this the BRVM comp is up 25.8% YTD and the BRVM 10 is up 27.11% YTD. Sonatel lost 43bps for the week to close at XOF 18,900.

Tanzania:

Activity and performance both rose in Dar last week with the banks driving both of these. CRDB (+7.14%), DCB (+2.44%) and NMB (+2.35%) all showed decent gains for the week as the banking sector accounted for 97% of the week’s turnover.