African Thoughts: July 28, 2014

African activity remains on the dull side, especially ahead of numerous holidays this week due to Eid celebrations. Foreign participation also remains extremely low as local investors dominate most markets. Below is a summary of some of the main points.


The Industrials index slid by 1.18% last week which means the second consecutive week of selling. However, volumes remain generally quiet with foreign investors largely absent. As usual, the big names Econet and Delta accounted for the bulk of the trading activity. Econet closed down 2.7% to 72c for the week while Delta closed unchanged at 125c. Late on Tuesday night Delta released its Q1 trading statement.


The NSE ASI fell by 1.41% last week. It was a frustrating week with no trading taking place on Thursday due to technical difficulties. The NSE did not cover themselves in glory with very poor communication throughout the day. Results seasons continues and during the week we saw results out from the likes of Cadbury, Stanbic, FCMB, Seplat, Zenith Bank, Intbrew, Transcorp, NB and Unilever. The banking sector gained 69bps for the week led by gains in Stanbic (+6.71%, N29.09), Diamond Bank (+6.01%, N6.70) and GTB (+3.33%, N31.00). On the other hand, the Consumers fell by 52bps. Market turnover was actually much improved but this has to be taken with a pinch of salt as there was a massive local HNW bookover in GTB while there were also some massive off market crosses in DangCem (again, mostly local). There was also heavy local activity in the likes of Oando, Transcor and Caverton. In economic news, the MPC announced unchanged interest rates of 12%.


The Nairobi bourse was generally soft last week with foreign activity skewed to the sell side, albeit on small volumes. Safcom was yet again the most active name in the market and is set to deploy LTE network after the House Committee approved the KES 14.9bn security contract (Safcom now allowed to buy 4G frequencies). The telco closed at KES12.20 (+80bps). Both banks had a tough week with Equity Bank losing 2.7% to KES44.75 and KNCB shedding 1.9% to KES53.00. EABL was also soft as the brewer slipped by 2% to KES288.00.


The Semdex gained 60bps while the Sem-7 gained a more modest 10bps last week. MCBG was initially soft yet gained into the close to eventually settle 1.4% higher at Rs213 while SBM inched up by 90bps to Rs1.07 and Bramer Banking gained 2.4%. In the hotels we saw Lux Island Resorts slide by 2.1% to Rs47 (after gaining 4.9% last week) while Sun Resorts and NMH both gained 1.2% to Rs41 and Rs87 respectively.

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