African Thoughts: May 27, 2013

With some global risk aversion and profit taking finally evident last week we saw developed markets come under a fair amount of pressure. This risk aversion manifested itself in Africa not only in performance but in liquidity as well as turnover all but dried up in a number of markets. As per usual, we take a look at some of the best and worst performing markets across the continent from last week.

Nigeria:

The Nigerian market was one of the best performers last week with the ASI gaining 1.20%. Banking stocks drove both activity (70% of quantity traded) and performance with the Bank 10 Index gaining a very impressive 3.20% as there were a number of foreign participants purchasing the likes of Zenith, UBA and Guaranty Trust Bank. Consumer stocks also put in a very solid performance with the Consumer Goods Index gaining 2.51% as Cadbury continues to rally post-results and gained an unbelievable 45% last week while the likes of competitor Nestle (+3.97%) also managed to close the week in positive territory. DangCem was all over the place last week with the counter falling over 7% on Thursday then managing to gain over 7% on Friday. International Breweries released FY 2013 results which saw a profit after tax of N2.506bn.

Zimbabwe:

The Zimbabwean market ended the week mixed last week with the Industrial Index gaining 0.85% while the Mining Index fell 1.88%. There was some positive news after the new charter was signed into law mid-week and this helped Industrials close higher on the back of positive investor perception. Market heavyweights Econet (45%) and Delta (22%) completely dominated activity with foreigners still heavily involved in purchases in the two counters. Econet announced that they have injected $50m into TN Bank Limited towards the recapitalisation of the banking arm. Seed Co announced full-year earnings which saw after-tax profits fall 34% to $12.6m.

Egypt:

The market witnessed substantial profit taking last week, leaving the EGX30 to end the week 2.8% lower. Market volumes were significantly lower relative to recent turnovers, the market witnessed an extremely slow week with static trading, to continue with its profit taking sentiment led by local and international institutions were names such as HRHO, CCAP and ORTE witnessed notable selling, also the real-estates sectors witnessed some selling pressure, names such as TMGH, OCDI and PHDC were notably sold in the market after the recent rally witnessed. It’s worth mentioning that GCC institutional investors managed to support the market to end the week as the sole net buyers in the market.

Mauritius:

Mauritius closed the week lower with the Semdex falling 0.3% to close at 1,942.79. Activity across the board was extremely slow going as trade was completely dominated by blocks in a few select counters. Banking stocks ended the week mixed with MCB gaining 0.6% while SBM and Bramer fell 1.0% and 3.6% respectively. Shareholders of ENL Limited have approved the bonus issue of preference as well as ordinary shares on the 24th of May.

Kenya:

The Kenyan market had its first weekly decline in four weeks on the back of decreased foreign activity with the NSE 20 Index falling 0.3%. EABL saw its first weekly decline in over 6 weeks after reaching a high of KES 423 with profit taking clearly evident. Britam dominated from an activity point of view thanks to a very large cross which went through mid-week whereby both the buyer and the seller were local. The economic survey detailing the 2012 performance was released last week which saw real GDP grow at 4.6%, up from 4.4% in the previous year but below the average Sub-Sahara African growth of 4.8%. Average inflation fell to 9.4% in 2012 from 14% in 2011.