African Thoughts: November 02, 2015

Nigeria:

The Nigerian ASI fell by 2.74% last week with banks (-3.43%) and consumers (-1.97%) both weak. Demand and volumes across the board are extremely weak. The Banking sector loss was triggered by losses on UBA (N3.50, -13.58%), Access Bank (N4.60, -8.37%) and GT Bank (N23.09, -5.76%). Likewise, the NSE Consumer index lost 1.97% week-on-week, with losses on the likes of Guinness (N125.00, -12.10%), Dangote Flour (N2.55, -5.56%) and Unilever (N38.68, -9.73%). Other losses were seen on the likes of Oando (N6.01, -39.66%), Stanbic IBTC (N18.91, -17.78%) and Transcorp (N1.81, -12.56%). We are in the midst of reporting season and last week saw the likes of Intbrew, Fidelity Bank, Stanbic IBTC, GlaxoSmithKline, Unilever, Skye Bank, Ecobank, Oando, Nestle, Dangote Sugar, FBNH, Dangote Cement, Seplat and Diamond Bank report.

In other news, The MTN Group in South Africa commenced discussions with the Nigerian Communications Commission (NCC) over the N1.04 trillion ($5.2billion) fine imposed by the industry regulator on its Nigerian subsidiary, MTN Nigeria Limited, for failing to deactivate unregistered SIMs and incomplete SIM card details on its network. The NCC has given a deadline of Nov. 16 to make the payment.

Kenya:

The NSE 20 and the NASI fell by 2.1% and 1.6% respectively last week. They are now down YTD 24.3% and 15.7% respectively. The highlight of a generally dull week was a massive local cross of 70m Equity Bank shares at a price of KES45 which was a strange price considering that the name has been trading around the KES41 level for a while. Elsewhere we saw Safcom fall by 4% to KES14.35 ahead of 2016 H1 numbers which are due out later this week. KNCB fell by 3.6% to KES40.25 with the banking group also having reported during the week.

Zimbabwe:

Some demand (albeit small) returned to the ZSE as the Industrials gained 21bps (YTD -19.63%). However, fundamentally nothing has changed and it appears that the buying was driven by bargain hunters. The only heavyweight that gained was PPC which closed up 2.11% at 97c. Econet (-93bps, 26.75c) and Seedco (-76bps, 98c) were both soft while Delta closed the week unchanged at 82c.

Mauritius:

Both the Semdex (+50bps, YTD -9.3%) and the Sem-10 (+80bps, YTD -6.4%) rose slightly last week although YTD are still in the red. Much of this rise was due to MCBG which rose to Rs211.25 (+80bps) although SBMH closed unchanged at Rs0.79. A big helping hand was also given by Gamm Civic which closed up 8% at Rs27.00 albeit on tiny volumes.