African Thoughts: June 30, 2012

It was a rather volatile week last week across the globe plagued with uncertainty until European Central Bank President Mario Draghi announced that they would do anything in their power to keep the single currency which helped quell investor fears. Markets managed to close in positive territory, with this positive sentiment filtering through to the majority of African markets. Below is a list of some the best and worst performing markets from last week.

Zimbabwe:

Zimbabwe had an excellent week last week and was the strongest market on the continent with the Mining Index gaining 5.27% while the Industrial Index gained 1.14%. The move higher on the Mining Index should however be taken with a pinch of salt as this was largely attributed to Rio’s gain of 42.5% as the name seems to be rallying as a result of the progress being made in so far as finding a solution to the company’s troubles, with the AGM now being rescheduled for Friday the 17th of August 2012. The Industrial Index rallied on the back of good performances in the likes of Innscor (+3.51%), Meikles (+14%) and Natfoods (+7.14%). The Zimbabwean banking sector has once again come under scrutiny after one of the banks surrendered its licence during the week. The central bank governor hinted that minimum capital requirements will be raised in the forthcoming monetary policy meeting.

Tunisia:

The trading week was cut short by one day in Tunisia due to a national holiday but the market however managed to close in positive territory with the Tunindex gaining 1.78%, making it the fourth consecutive week that the market has closed higher. The recent rally has been attributed to several companies reporting better than expected H1 numbers over the last couple of weeks. Only four companies are yet to report results.

Nigeria:

There was a decent enough performance in Nigeria last week with the ASI gaining 0.9%. There was a host of companies that released H1 2012 results last week with a number of the results being pretty much in-line with expectations. Dangote Cement was a star performer with the name rallying 4.35% ahead of H1 2012 results which are due to be reported on Wednesday (Dangote Cement carries a 27% weighting in the NSE). The Central Bank kept the MPR unchanged at 12% last week.

Kenya:

Kenya also put in a rather solid performance with the NSE 20 Index gaining 0.79%. Banking heavy weights Equity Bank and Kenya Commercial Bank both reported H1 2012 results with PAT increasing 14% and 50% respectively. Both names have traded flat since releasing results. EABL performed rather well last week and reached a high of 227 while there was some rather decent volume in Safcom as foreigners were involved in both sides of the counter.

Mauritian:

After a couple of weeks of declines the Mauritian market managed to rebound with the Sem - 7 gaining 0.71%. Banking stocks ended the week mixed with MCB managing to gain 0.6% while SBM closed the week flat at 82.00. The SEM approved the listing of up to 318,492,120 ordinary shares of ALTEO and the shares will be available for sale on the admission date of 31st July 2012.

Tanzania:

The Tanzanian market was rather dull last week with the DSEI gaining a mere 0.01% to close at 1,441.12. There was continued foreign interest in NMB as the company is set to report H1 2012 results over the next few days. There was speculation last week that the DSE is looking into increasing foreign ownership levels. More on this will be revealed as soon as we get further information.

Egypt:

Egypt was the worst performing bourse on the continent with the EGX falling 2.2%. The move lower was largely attributed to the news that President Morsy assigned Hisham Kandil (current minister of water resources) as a PM, the market reacted negatively to this news as investors were expecting more transparency on the new PM. CCAP reported worse than expected Q1 results last week.

Zambia:

The Zambian market was rather soft last week with the LuSE falling 1.1%. Stanchart (-11.1%) was the major contributor towards the move lower as investor sentiment continues to wane after the company announced that they will retain all earnings until capital requirements are fulfilled. The LuSE has removed the suspension on Celtel and the shares are set to commence trading on the 1st of August 2012.