African Thoughts: March 31, 2014

The general market themes across Africa continued last week. In general trading activity is weak with just the odd block punctuating dull sessions.


The Industrials slipped by another 2.85% last week as market volumes remain low. There really is nothing much to report on as each week the same theme continues to run. Delta shed 2.5% to 115c while Econet dropped by 1.6% to 61c and Innscor fell by 8.8% to 62c. The Industrials are now down 12.95% for YTD.


The NSE ASI rose by 1.43% mostly thanks for a strong rally in the consumers (+3.06%). Much of this outperformance was due to Guinness which rose by an impressive 18.55% to N194.25 while Nestle increased by 7.91% to N1050 (a chunky block traded in the name during the week). The banking sector spent most of the week on the back foot and eventually ended the week down 5.01% with all Tier 1 banking names losing ground, the most notable of which was Zenith (-10.91%, N19.60). Dangote Cement gained 5.15% for the week after releasing FY13 results. Also out during the week were results in Diamond Bank, Unilever, FCMB, UBA, Sterling Bank and Glaxosmithkline, amongst others.


After a few positive weeks the NSE finally retreated last week, albeit marginally while market turnover increased. Most notably, foreign investors turned net buyers for the week with strong foreign participation in EABL, Safcom and KNCB (these 3 stocks accounted for more than 75% of the total foreign buying). The most active stocks were once again the usual suspects although weakness was evident in Safcom (-2.4%, KES 12.30), KNCB (-1.6%, KES 46) and Equity Bank (-80bps, KES 31.75). EABL had a strong week and gained 3.1% to close at KES 269.

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