African Thoughts: June 07, 2014

Zimbabwe:

The Industrials index gained a solid 2.11% last week although volumes remain incredibly low. Heavyweight stocks led the rally with names like Econet (+4.56%), Innscor (+4.99%) and BAT (+4.91%) all strong. OK Zim released their FY14 results and the stock closed up 2.83% for the week. Foreign participation remains very low.

Nigeria:

The NSE ASI inched higher by 13bps for the week under review. There were solid gains in the likes of Ashaka Cement (+21.76%, N27.36), Forte Oil (+16.89%, N250.01 – still benefitting on the back of the inclusion into the MSCI) and Transcorp (+12.56%, N4.39). Oil and Gas remains strong as Oando climbed by 9.72% to N19.98. Banks showed signs of softness/profit taking after their recent rally with most names generally unchanged to slightly weak. Once again, volumes were dominated by some chunky crossing activity (generally local selling, foreign buying). On Thursday, the new CBN Governer Emefiele released his new policy agenda (see separate Securities Africa research). In company news, Lafarge is to transfer all its businesses in South Africa and Nigeria to Lafarge Cement WAPCO Nigeria and rename the company Lafarge Africa Plc while FBNH announced the acquisition of ICB Financial Group.

Kenya:

The NSE 20 fell by 70bps for the week under review (YTD -1.6%). Market turnover was also much reduced for the week as we lacked the chunky crosses of the previous week. As usual, the bulk of the activity focused on the large cap names. Safcom lost 1.2% to KES 12.80 on decent volumes while EABL shed 70bps to KES 281.00. The banks were somewhat more upbeat with KNCB closing up 50bps at KES 49.25 while Equity Bank ended the week unchanged at KES 41.75. Somewhat unusually for an illiquid name, SCAN Group saw a couple of large crosses as the name closed the week down 1% at KES 47.25. In economic news, the National Bureau of Statistics released May’s CPI which showed a 7.3% increase in inflation.

Mauritius:

The Semdex gained 70bps while the Sem-7 was more muted and only gained 10bps. Market activity was much higher than normal with a number of book-overs taking place. Banks were mixed as we saw MCBG finally show some signs of restraint (-70bps, Rs220). SBM gained 1% to Rs1.06 and Bramer Banking added 60bps to Rs6.84. Hotels were generally strong with Lux Island Resorts rising by 1.4% to Rs43.10 and NMH closing up 1.5% at Rs84.50.