African Thoughts: March 29, 2016


The Nigerian ASI rose by 80bps last week with demand in both banks (+1.37%) and Consumers (+4.96%) driving the index higher. Banks were driven thanks to gains in the likes of Fidelity Bank (N1.37, +14.17%) and Skye Bank (N0.99, +3.13%) while the consumers were pushed northwards by NB (N117.70, +12.10%) and Unilever (N30.92, +4.99%). In economic news the MPC raised interest rates from 11% to 12% and also increased the Cash Reserve Ratio from 20% to 22.5% while inflation rose to 11.4% for February.


All 3 indices closed marginally in the green last week. The main index that we all follow (NSE 20) rose by 1.4% and is now down just 1% YTD although overall foreign participation fell to 58%. Safcom was the most active stock for the 5th straight week with the telco gaining 2.4% to KES16.90. The banks were also fairly active although had contrasting weeks - KNCB gained 1.8% to KES42.00 while Equity Bank closed 2.4% lower at KES40.75. There was also some action in the normally illiquid Barclays Bank (+5.5%, KES12.40) while EABL was quiet yet again.


Unfortunately it was another quiet week in Harare from an activity point of view with turnover amounting to a dull $3m. Most of the activity was centered around Delta as $2.4m worth of stock changed hands while the rest of the market was very quiet with not much on the go in the other heavyweights. The market continues to fall as the Industrial Index closed the week -1.68% lower thanks to losses in Seedco (-19.89%), DZL (-11.76%) and NatFoods (-8.76%).


The market closed the week slightly lower in Port Louis with the Semdex falling -0.1%, taking the YTD loss to -1.2% on the back of foreign selling. Banking stocks ended the week mixed with MCBG falling -0.8% while SBMH managed to gain +1.5%. Hoteliers had a rather good week with NMH gaining +2.0% while SUN closed +0.3% higher. It was an absolutely dull week in terms of activity with total turnover amounting to $2.6m as a result of the Easter celebrations. Most of the activity was centered around MCBG, LUX, NMH and CIEL which accounted for 53.3% of turnover.

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