African Thoughts: March 03, 2014

Earnings season resumed in Africa with the large Kenyan banks reporting as well as Dangote Flour and Nestle in Nigeria. Foreign investors continue to remain mostly on the sidelines although a couple of very chunky crosses helped this.

Zimbabwe:

The Industrials index dipped by 66bps last week although the Feb performance was actually a marginal gain of 11bps. The main drag on the index for the week was Delta which lost 2.32% to 122c while Natfoods lost 4.76% to 200c. BAT released their FY13 results during the week - the stock lost 74bps to 1340c. On the positive side, Econet gained 2.67% to 65.30c. In general, market activity remains thin with foreign participants largely absent.

Nigeria:

It was a generally quiet week for most of the week until a really large cross trade in NB on Friday (both sides foreign, about $50m). The ASI rose by 3.3% for the week with strength being shown in banks (+6.99%), insurance (+3.49%) and consumers (+2.41%). Most of the banks enjoyed a solid week with gains recorded in the likes of UBA (+17%, N7.84), Skye Bank (+12.12%, N3.70), FBNH (+10.43%, N13.24) and GTB (+7.31%, N25.40). Bucking this trend was Access which slipped by 2.65% to N7.70. Consumers owed much of their outperformance to Guinness which rose by 17.17% to N197.90. During the week we saw results out for Nestle (FY13) and Dangote Flour (1Q14).

Kenya:

The NSE 20 recorded its first decent weekly gain for a while as it rose by 2%. Turnover also improved from the recent lows with activity in EABL and Safcom the main contributors in this regard. Much of the focus was on the FY13 results from KNCB and Equity Bank, KNCB showed a 2.2% increase in EPS (above forecasts) while Equity Bank surpassed forecasts by 6.8%. Performance was mixed for the banking giants with KNCB losing 60bps to KES 43.75 while Equity Bank gained 80bps to KES 32.25. Strong demand in EABL and Safcom drove these stocks higher by 8.2% and 2.6% to KES 264 and KES 11.70 respectively.

Mauritius:

The Semdex lost 30bps while the Sem-7 lost 40bps with the broader market all pretty soft. In the banking sector there were losses in MCB (-20bps, Rs212.50), SBM (-90bps, Rs1.05) and Bramer Banking (-2.7%, Rs7.10). The hotels also had a rough week as all names closed in the red, NMH (-60bps, Rs83.75), Lux Island Resorts (-3.6%, Rs37.60) and Sun Resorts (-20bps, Rs42.90) all losing ground.