African Thoughts: May 26, 2014


The Industrials index shed 69bps last week; YTD the index is now down 14.65%. The major losers included Meikles (-5.56%, 17c), Econet (-2.98%, 64.03c), Barclays (-2.73%) and Innscor (-1.43%). Market activity remains very quiet although 2 chunky crosses (in Econet and Delta) were about the only real excitement during a dull week.


The NSE ASI gained 1.53% for last week. The main outperformer was the Oil and Gas sector which gained 15.54% for the week. All names were strong with particular strength noted in Oando (+25%, N20.00) and Forte Oil (+19.62%, N186.54). There were also notable gains in the likes of NB (+8.02%, N176.13), Transcor (+6.58%, N3.89) and Dangote Sugar (+6.95%, N9.85). Banks rose by 1.84% with gains recorded in ETI (+8.07%, N15.13) and FBNH (+5.54%, N13.90). Consumers rose by 3.53% for the week with most of this due to the NB rally. During the week we saw the release of Dangote Flour Mills 2014 Q1 results while in economic news the CBN kept MPR unchanged at 12%. Please note that the strength in Forte Oil and ETI can partly be attributed to the 2 names being included in the MSCI Frontier Market Index.


The NSE 20 slid by 80bps last week while turnover also fell from the previous week with foreign investment still on the light side. The bulk of the trading activity took place in the usual suspects. EABL had a torrid week and eventually closed down 6.1% at KES 279. The banks were generally solid as we saw KNCB gain 1.9% to KES 46.75 while Equity Bank closed unchanged at KES 39.75. The most actively traded name was Safcom which gained 80bps to KES 12.95.


The Sem-7 rose by 90bps for the week under review. Performance was mixed across the sectors. In the banks, we saw MCBG gain 2.8% to an all-time high of Rs220 while SBM closed unchanged at Rs1.05 while Bramer banking lost 1.1%. In the hotels we saw Lux Island Resorts gain an impressive 6% to Rs43 while NMH closed unchanged at Rs84.50 and Sun Resorts gained 2.7% to Rs40.20.

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