African Thoughts: May 29, 2017


The Lagos bourse had a very good week with Banks (+7.64%) having an exceptionally bullish week. This was further enhanced by some nice volumes going through in the sector. Leading lights included FBNH (N4.89, +21.95%), Guaranty (N35.28, +12.00%), Zenithbank (N19.13, +6.93%), ETI (N10.29, +5.00%), Diamondbank (N0.93, +4.49%), Stanbic (N26.95, +3.65%), Access (N7.59, +3.27%), UBA (N7.50, +2.88%) and FCMB (N1.19, +2.59%). Consumers were a lot more subdued but still rose by 1.71% for the week. Both local and foreign investors are involved in the trading although aggressive buyers pushed the market higher ahead of the long weekend, with Friday extremely active and bullish.


The NSE 20 in Kenya rose by 4.78% for the week as local participants have finally returned to the market and are participating in the outperformance. Volumes remain hit-and-miss though with the “Big 4” names continuing to see the bulk of the action. Once again we saw Safcom lead the way as the telco rose by 7.41% to KES21.75 on good volumes. EABL also witnessed some pretty consistent crossing throughout the week while the name climbed steadily by 3.02% to KES239.00. The 2 big banks were also solid, KNCB rising by 4.0% to KES39.00 while EqBnk rose by 8.57% to KES38.00.


It was initially very slow going in Zimbabwe due to the Africa Day holiday celebrations, but the market finally burst into life on the last trading session of the week, with total value traded amounting to USD 4.7m for the week thanks to some action in Seedco and Econet. The market had a very solid week from a performance point of view with the Industrial Index gaining +4.55% thanks to Econet (+22.1%), BAT (+6.73%) and OK Zim (+6.06%). OK Zim released FY 2017 numbers which saw revenues increase +8%. Much of this strong outperformance can be attributed to some aggressive local buying as local funds are reinvesting proceeds from Fixed Income maturities into the equity market.


The Semdex dripped lower by 30bps for the week although is still up an impressive 14.18% YTD. Activity also dropped off from recent weeks while we saw both major banks slightly weaker. MCBG dropped by 3.2% to Rs242.00 as it finally ran out of steam while SBMH closed at Rs7.56 (-30bps).

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