African Thoughts: May 13, 2013

Last week saw global markets in general pretty strong, and the African markets were no exception. Demand for investments into Africa continue unabated and we saw a week where foreign buying pushed most markets higher.

Zimbabwe:

The Industrials index rose by a stunning 6.09% to reach an all time high despite on-going political noise. Demand for the blue chips from foreign buyers continues to be the main driver of this strength as the Ind index is now up 33.63% YTD. Mining gained 4.28% for the week (+13.84% YTD). Interestingly, OK Zim and ABCH were among the most liquid names while Delta remained quiet ahead of the Mar13 numbers due out any day.

Nigeria:

Strong foreign buying in the banks and consumers drove ASI performance higher by 2.57% for the week. Banks and Consumers closed up an impressive 4.53% and 6.14% respectively. The market also witnessed some good volumes as some chunky crosses took place across myriad names. Some of the best performing names last week were Cadbury (+25.5%, N43.90) while the best performing banks were Diamond (+15.99%, N7.11) and UBA (+15.90%, N8.02). No large cap names were significant fallers for the week. We also saw some results out for UBA, Dangote Sugar, UACN and Wapco.

Egypt:

The market managed to end the week up 2.3% on improved volumes, the rally was fueled by the positive news regarding the government settling with OCI on the Tax dispute issue. After the prolonged dispute the company agreed with the Egyptian Tax Authority (ETA) to pay EGP7.1 billion worth of back-taxes pertaining to the sale of the cement business to Lafarge. The agreed amount is based on the tax claim submitted by the ETA of EGP4.7 billion, including accrued interest and delayed fees. According to the agreement, OCI will pay the outstanding amount over ten installments between 2013 to 2017. Also adding to this the return of well known Naguib Sawiris (Ex-CEO ORTE) who was self–exiled.

Kenya:

A good week in Nairobi as the NSE20 gained 1.41% while the All-Share gained 2.05% as foreign demand for the blue chips drove the market. At one stage, Safcom touched a high of 7.20 during the week while EABL traded at 345. Safcom results are due out tomorrow (Tues 14 May). Banks were also in demand as investors look to take positions before the upcoming results. In economic data, the MPC cut interest rates by 100bps to 8.50% as they attempt to stimulate further economic growth.

Mauritius:

The Semdex closed up 1.6% as it now stands at a 20-month high (up 12.8% YTD) as foreign participation pushes prices higher. MCB struggled early in the week but closed strongly thanks to foreign buying and closed unchanged at Rs195 while SBM finished up 1% at Rs1.03. The hotel sector rebounded impressively led higher by NMHL (+8.7%, Rs78).

Tanzania:

A rather quiet week in Dar as foreign investors very quiet. Both the DCEI and the TSI ticked slightly higher (+6bps and +24bps respectively) with gains on NMB, TCC and Swissport the main reasons for this. DCB, CRDB and TBL all fell slightly.