African Thoughts: March 14, 2016

Nigeria:

Trading activity in Lagos remains eerily quiet as foreign investors generally happy watching from the sidelines. The ASI did close slightly higher by 65bps for the week although is still down 9.27% YTD. The major reasons for the strong index was Oando (N5.35, +53.30%) and Flour Mills (N20.16, +18.03%). The Banks rose by 2.35% with gains on the likes of FCMB (N0.82, +15.49%), UBA (N3.44, +10.61%), GT Bank (N16.25, +1.63%) and Zenith Bank (N12.35, +1.48%). The Consumers were also up by 96bps thanks to Flour Mills (N20.16, +18.03%) and NB (N100.00, +2.04%). Late on Friday Diamond Bank issued a profit warning, triggered by the continued deterioration of the country's macro-economic conditions and higher than expected impairment charges on loans made to the Energy and Commercial business sectors. In economic news Nigeria's real Gross Domestic Product (GDP) growth rate declined to 2.11 per cent in the fourth quarter of last year compared to 2.84 per cent in the third quarter.

Kenya:

The Kenyan bourse fell last week on decent trading volumes. The NASI fell by 1.4% while the NSE 20 fell by 60bps. As has been the case recently, Safcom ended the week as the most active stock although the telco did fall by 4.1% to KES16.30. The banks also spent the week on the back foot with Equity Bank losing 2.3% to KES41.75 while KNCB fell by 3% to KES40.50. EABL bucked this trend by gaining 1.8% to KES282.00.

Zimbabwe:

Some foreign buying returned to the ZSE after a very long absence and thus pushed the Industrials up by 1.02%. Reporting season continues as last week saw the release of Truworths as well as Innscor and its related companies NatFoods and Colcom. In economic news the IMF revised down Zimbabwe's growth forecast from 2.7% to 1.4% after taking into account the current slowing demand and deflationary pressures in the market. As mentioned, foreign demand returned to the ZSE and in particular we saw this in heavyweights Econet (+8.65%, 25c) and Delta (+1.81%, 5.25c). There was also a solid rise of 5% in CBZ to 10.5c while OKZ slipped by 11.99% to 3.11c.

Mauritius:

Both the Semdex and the Sem-10 fell by 50bps last week although both indices are marginally in the black for 2016 thus far. The main cause of the underperformance was the banks as we witnessed SBMH fall by 2.9% to Rs0.66 while MCBG closed at Rs211.00 (-10bps).