African Thoughts: May 05, 2014

All African markets had the day off on 1 May for Workers'/Labour Day. In addition, South Africa had another holiday on the Monday thus creating a very disrupted week. Overall trading activity remains low with crosses about the only action. As a general rule, local investors are a larger percentage of overall volumes than foreign investors.

Zimbabwe:

The Industrials finally showed some bullish activity as we saw the index gain 1.91% for the week, thus gaining for the second consecutive week. Demand for the large caps rebounded after the recent softness as we saw Delta gain 4.1% to 115.55c and Econet rise by 1.7% to 62.04c. Both these market heavyweights are expected to release results later this week. Innscor and Seedco also rebounded as we saw them gain 2.7% to 64.2c and 3.3% to 78c respectively.

Nigeria:

The ASI slipped by 84bps last week during the shortened week. The overall trading activity remains dull with the odd cross spiking volumes. Results season continues in earnest as we saw results out in the lies of FBNH (FY13 and 2014 Q1), Dangote Sugar (FY13), ETI (FY13), Wapco (2014 Q1), Guinness (2014 Q3), Skye Bank (2014 Q1), Unilever (2014 Q1), FCMB (2014 Q1), Nestle Nigeria (2014 Q1), GlaxoSmithkline (2014 Q1), UACN (2014 Q1) and Access Bank (2014 Q1). The Banking sector lost 1.09% for the week despite a rally on Wednesday and Friday. The consumers had a tough time as the sector lost 14.33%, led lower by the likes of Guinness (-10.26%, N170.50) and Cadbury (-9.72%, N71.32). Recently listed Seplat gained 5.35% to N630 on good volumes.

Kenya:

The NSE 20 ended the week pretty much in line with where it had started as foreign participation dropped even further. Strong buying in Equity Bank continues to push the name higher as it gained another 6.5% to KES 38.50, a 1-year high. The bank is set to issue 300,000 smart phones to retailers which will be used as PoS systems as they prepare to launch their mobile operations later this month. The most active name on the week was KNCB which closed up 50bps at KES 50.00 after releasing 2014 Q1 results late in the week. Other large caps Safcom and EABL gained 40bps and 1.4% to KES 13.10 and KES 297 respectively.

Mauritius:

The Semdex lost 80bps while the Sem-7 fell by 60bps as we saw general weakness across the board. MCBG touched another new record high of Rs 219.50 although it did close the week marginally soft at Rs218.00 while SBM lost 1% to Rs 1.03. The hotels were also soft as we saw losses in NMH (-60bps, Rs 86.00) and Sun Resorts (-70bps, Rs 39.90) while Lux Island closed unchanged at Rs 40.00. Air Mauritius gained 3.2% to Rs 16.30.