African Thoughts: March 11, 2013

The risk switch was firmly switched on in the developed world last week with the Dow closing at a new all-time high amidst better than expected economic data with unemployment dropping. A number of African markets also put in a rather solid performance. As is usually the case, we take a look at some of the best and worst performing markets across the continent.

Zimbabwe:

The Zimbabwean market was the top performing bourse on the continent last week with the Industrial Index gaining 3.36% while the Mining Index gained 2.38%. Innscor released H1 numbers which came in below expectations as the name fell 3.2% to close the week at 90c. Econet dominated activity last week after trading post share split and account for about 59% of total value traded across the market. With the referendum looming in the horizon (scheduled for the 16th of March) it will be interesting to see what stance the global investment community takes with regards to trading in Zimbabwe over the next few sessions.

Kenya:

With a shortened trading week due to the elections that took place last Monday the market was surprisingly strong amidst uncertainty with regards to the outcome and whether or not things would flow smoothly. The Kenyan market was the second strongest market on the continent with the NSE 20 Index gaining 3.3% albeit on much thinner volume than what we have seen in recent weeks. It must be stated that the election process went relatively well with very few reports of any violence. The results were released over the weekend and Kenyatta was announced as President elect. Time will tell over the next few days/ weeks how strongly the opposition dispute the result. From a trading activity point of view, Safcom was the most active counter in the market last week with foreign demand boosting activity in the name. The IMF announced that they have used the Kenya model for monetary policy in a study.

Mauritius:

The Mauritian market also put on a rather solid performance with the Sem-7 gaining 1.6% to close at 376.17. The move higher was largely driven by MCB as foreigners continue to look for stock in the name as the counter gained a rather impressive 3.0% to close at 190.25. SBM on the other hand ended the week unchanged as foreigners also dominated activity in the name. On the news front, Innodis appointed Victor Seeyave as the new chairman.

Egypt:

Bearish sentiment in the Egyptian market continued last week lead by notable selling for International and GCC institutional investors, leaving the EGX30 to end the week down 1.9% on notably weak volumes. Ongoing clashes in Cairo and several Egyptian cities alongside the rising tension on the political front added to the negative sentiment. A spokesman from the Public Prosecutor’s office announced that Nassef Sawiris CEO of OCI and his father Onsi Sawiris former Chairman of the company were banned from travel and placed on an arrivals watch list on allegations of EGP14 billion tax evasion pertaining to the sale of Orascom Building Materials Holding (OBMH) to Lafarge SA back in 2007. The market continued to trade in the red with names such as COMI, ORTE and HRHO witnessing aggressive selling.

Nigeria:

The Nigerian market came under a fair amount of pressure last week with the ASI falling a rather disappointing 1.01%. Consumer stocks were the main drag on the market as the Consumer Goods Index fell 1.51% thanks to the likes of Nestle (-5.64%), Guinness (-4.16%), DangCem (-3.71%) and Cadbury (-7.32%) as foreign and local institutions looked to take profit in the sector. The Banking sector however managed to rally on Friday helping the Index close 0.63% in positive territory on good volume as the financial services sector accounting for 79% of value traded for the week.