African Thoughts: June 03, 2013

Global markets had a general sell off last week yet African markets, as usual, were mixed across the board. Many investors were focused on the ZAR which took an absolute hit on a number of negative issues: continuing mining issues; poor economic data including weak GDP, Trade Balance data and the April budget deficit. Some summaries of the African markets below:

Zimbabwe:

Both Zimbabwe indices gained last week with the Industrials up 14bps and the Mining up 1.92%. Results season is under way and most eyes were on Econet which released slightly weak numbers late on Thursday. However, activity was rather quiet on the ZSE for the week. Delta meanwhile closed at an all-time high of 146.01c (+70bps) as foreign demand remains strong after their recent strong results. Dairibord gained 2.7% to 30c while Seedco rose by 2.86% to 72c on the back of an attractive outlook due to more government support for seed procurement.

Nigeria:

The Nigerian ASI grew by 1.19% for last week, thus a gain of 12.7% for May and an impressive +34.6% for the year to date. It was an interesting week with a holiday on the Wednesday shutting the market. As is standard, the banks and consumers dominated the activity, and both of these indices were strong for much of the week before selling off on Friday and ending the week just marginally positive. In the consumers, we saw profit takers drive down the prices of UACN (-17.73%, N58) and Cadbury (-14.01%, N55.49).

Egypt:

The market witnessed a notable rally last week led by strong buying from International institutions along with GCC Individual investors, leaving the EGX30 ending the week up 1.77%. The market rally was mainly attributed to funds re-balancing against the MSCI index as last week was the last week in the month since the re-balancing was announced, and names such as TMGH, COMI and OCIC benefited from the very strong volumes, yet names such as HRHO did not benefit from the rally after the stock has been removed from the MSCI index. ORTE managed to witnessed aggressive buying to end the day at EGP5.00 up 4.4% to set the highest close since September 2008, this comes after buyout bid (EGP4.90) from Altimo failed.

Tunisia:

The Tunindex was up 1.12% last week. Several listed companies held their Annual General Meetings this past week with most companies showing signs of improvements compared to 2011 (the year of the Jasmin revolution). The Central Bank of Tunisia kept the benchmark interest rate unchanged.

Kenya:

The NSE 20 gained 80bps last week despite a drop in foreign purchases. Foreign participation was mostly on the sell side of the market. The most active stocks were the usual suspects, i.e. the blue chips. Bamburi Cement saw a chunky cross go through which meant the name closed up 6.3% at KES221 as well as being one of the most active stocks. EABL lost some ground, closing down 5.4% for the week at KES 367 while Safcom rose by 3.6% to KES 7.25 on strong foreign demand.

Malawi:

Strong demand in Illovo, NBM, NBS and TNM pushed the market higher. The gains in Illovo and NMB were due to solid FY12 results as well as anticipation for good H1 13 numbers. The other interesting factor is the recent strength of the Kwacha which was up approx. 20% for May. Seasonality dictates that the kwacha is typically strong during the tobacco season on the back of tobacco sales and other minor exports. Local investors expect this strength to continue until at least the end of the season (typically Mar-Jun, but this year many feel it could last until end of July).

Mauritius:

As usual, trading in MCB (+0.40%) and SBM (+1%) dominated trading accounting for about 79% of the weekly turnover. The Semdex gained 10bps while the Sem-7 gained 40bps. In the hotel sector, NMH lost 40bps to Rs70.75.

Francophone Region:

The BRVM market had a strong week closing up 7.76% for the week, now up an incredible 35.90% YTD (BRVM10). A number of stocks gained, but as always the only stock that matters is Sonatel, which closed up 10.75% at XOF19,000 with some really aggressive buying early in the week.

Tanzania:

A strong week in Dar as the DSEI rose by 46bps while the TSI gained 1.78%. The banks were in demand with NMB and CRDB gaining 3.95% and 6.76% respectively.

Botswana:

A marginal increase of just 8bps for the DCI. The main outperformance was driven by gains in the blue chips – FNBB (+5t), Stanchart (+26t) and Sechaba (+1t).