African Thoughts: March 23, 2014

It was a very lethargic week across all the African markets last week as investors remain cautious as the Nigerian elections get ever closer. Activity plumbed new depths in a number of our markets.

Nigeria:

The ASI fell by 4.51% last week on woeful volumes of $60m for the entire week. This is an average daily turnover of $12m and this was in fact helped by some crosses late on Friday. Foreign participation is all but absent. On the back of the lack of interest we saw general softness across most names, banks (-11.77%) in particular getting hard hit. Losses in the likes of Zenith Bank (N16.49, -19.95%), Diamond Bank (N3.62, -14.82%) and Fidelity Bank (N1.29, -14.57%) were the main contributors to the weakness. The Consumers were also down during the week by 2.67% triggered by losses on the likes of Dangote Flour (N2.90, -17.85%).

Kenya:

The NSE 20 fell for the 3rd consecutive week. Foreign investors remain net sellers for the 4th week in a row while overall foreign participation improved markedly to 58%, most of this on the back of a couple of chunky crosses of foreign buying in KNCB. As such, KNCB was the most active stock for the week and closed up 1.7% at KES60.50. Equity Bank didnt catch the bid though and slipped by 1.9% to KES51.00. EABL was very strong with local buying pushing the brewer up 6.6% to KES324.00 while Safcom closed marginally higher at KES15.85. EABL was the no 1 gainer in the entire market for the week under review.

Zimbabwe:

There used to be a time when activity on the ZSE was rather respectable. Those days seem very far away as the market remains extremely dull. Outside of a chunky cross in Dawn Properties there was absolutely nothing happening. Total turnover for the week was $6.69m (of which $4.3m was Dawn) while the Industrials fell by 21bps (-26bps YTD).

Mauritius:

Both the Semdex and the Sem-10 fell by 1.1% last week and are now down 5.7% and 4.4% YTD respectively. As with other African bourses the SEM is lethargic and generally soft. We saw weakness in MCBG (-1.3%, Rs195) and SBMH (-2%, Rs0.97). In the hotels we saw weakness in NMH (-4.4%, Rs60.00), Lux (-90bps, Rs54.50) and Sun (-3.5%, Rs34.00).