African Thoughts: July 25, 2016


It was a rather diabolical week from an activity point of view in Lagos as both foreign and local interest continues to wane with turnover falling -36.34% to a dire $30.95m for the entire week. Unfortunately there are no names worth mentioning from an activity point of view. The market came under some pressure with the ASI closing -3.98% lower as banking stocks took some serious strain with the sector falling -7.28% as the Naira continues to weaken. There were some heavy losses in the likes of ETI (-15.41%), GTB (-7.80%), Zenith (-6.17%) and UBA (-4.35%) while tier-2 banking stocks were particularly hard hit. Consumers (+0.89%) closed slightly higher, albeit on tiny volume with NB (+2.97%) and GSK (+2.49%) enjoying some decent gains. Unfortunately with the summer holidays in the northern hemisphere, we expect the complete lack of interest to continue for the next few weeks.


The market fell for the second straight week in Nairobi with the NSE 20 Index closing -2% lower, taking the YTD loss to -12.8. On the positive side, activity increased +19.5% with turnover amounting to $37.35m as foreign participation increased to 81.4%. Another positive was that foreign investors were net buyers for the first time in five weeks with net inflows amounting to $6.6m. It was all about Safcom and EQBNK last week as together the two names accounted for 71.1% of total volume traded. Safcom had a very good week from a performance point of view with the telco gaining +4% on the back of foreign purchases as net inflows amounted to $4.21m. EQBNK (-3.9%) came under a bit of pressure, but still managed to record net inflows to the tune of $2.06m. Unfortunately there is not much else to report as the rest of the market heavyweights were dreadfully quiet. EABL is due to release FY 2016 results on Friday the 29th of July.


There were finally a few signs of life in Harare last week as activity managed to increase +226% to $4.05m with some decent activity in Delta (33%), Seedco (27%) and Econet (18%). Unfortunately, the market closed in negative territory with the Industrial Index falling -0.70%, taking the YTD loss to -13.86%. Market heavyweights Econet and Delta were drags on the Index as the names fell -3.86% and -1.32% respectively. On the economic front, inflation for June declined -1.36% from a year earlier.


It was a much better week from an activity point of view in Port Louis with turnover amounting to $9.18m, but this should however be taken with a pinch of salt as MCBG and SBMH accounted for 72.5% of total value traded. On the negative side, the market closed slightly in negative territory with the Semdex closing -0.08% lower as foreigners were net sellers to the tune of $5.68m. Banking stocks ended the week mixed with MCBG falling -0.4% while SBMH gained +1.6% with foreigners being net sellers in both names. The monetary policy committee held their meeting on the 20th of July 2016 and decided to reduce the key repo rate by 40bps to 4.0%, citing that the downside risks to domestic growth outweigh the risks of inflation.

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