African Thoughts: November 11, 2013

It was a rather mixed bag from a performance point of view in developed markets as economic data out in the U.S on Friday surprised to the upside. African markets were characterized by relatively quiet volumes with activity dominated by a few crosses here and there. As per usual, we take a look at some of the best and worst performing bourses from across the continent.

Nigeria:

The Nigerian market managed to close the week slightly higher with the ASI gaining +0.28% thanks to a second consecutive weekly gain in Nestle (+8.08%) and a strong move higher in Cadbury (+6.80%) while the move higher was mitigated by the likes of Dangote Cement (-2.63%) and Guinness (-3.24%). Tier-1 banks came under some pressure for the most part as the likes of UBA (-4.73%) and First Bank (-0.80%) were amongst the worst hit. On the positive side, activity increased (+39%) for the week thanks to a few big crosses with Zenith Bank, Dangote Cement and Guaranty Trust Bank amongst the most active (value traded). In other market news, Guaranty Trust Bank Plc (GTBank) has concluded plans to issue a new five-year $500 million Eurobond. The proceeds from the Eurobond would be used to finance the power sector and potentially oil and gas and other infrastructure projects as well as the bank’s expansion into sub-Saharan Africa.

Kenya:

The Kenyan market continued on its upward trajectory with the NSE 20 Index gaining 0.6% to close above the 5,000 point mark as equity turnover increased 21% to $40.57m on the back of strong local investor participation. Safcom was the week’s most active counter after releasing better than expected H1 2014 results with the name managing to put on a gain of 2.1% to close at KES 9.75, reaching a high of KES 10.20 during the week. The two major banking stocks came under some serious pressure with Kenya Commercial Bank falling -4.6%. Equity Bank released rather disappointing Q3 2013 performance figures and closed the week 4.2% lower. Kenya Airways was the week’s best performer, gaining 23.3% to close at KES 12.95 with the airline releasing Q2 2014 operating performance numbers. The Central bank retained the Central Bank Rate at 8.5%, citing a stable exchange rate and largely stable inflation as its main drivers. Although inflation has been trending upward the Central Bank indicated that the increase was not demand driven, hence no need to hike its benchmark rate.

Zimbabwe:

Despite the concerns raised by the bankers association of Zimbabwe, the market managed to close the week higher with the Industrial Index gaining 1.23% while the Mining Index gained 1.89%. Another positive was the increase in turnover for the week as value traded amounted to $9.68m (+46.9%) on the back of increased foreign purchases (+75.26%). Econet completely dominated proceeding on the trading front as the telco accounted for 60% of the week’s turnover with foreign investors heavily active in the name. The national budget announcement has been delayed to either December or January. The government is expected to come up with an expansionary budget that will stimulate the faltering economy.

Mauritius:

The Mauritian market was a bit of a mixed bag last week as the Sem-7 fell 0.10% while the broader market closed higher with the ALEX-20 gaining 0.46%. The banking sector finished the week mixed with MCB gaining +0.40% while SBM fell -1.0%. In terms of activity, things were rather slow going with the odd cross here and there as total value traded amounted to $6.60m. Foreigners were net buyers in MCB while they were net sellers in NMH and SBM.

Egypt:

The market managed to end the week higher leaving the EGX30 index to close at 6,415.82 (+3.85%) on very strong volumes. Institutional investors stepped in aggressively last week picking up big names such as COMI (a new 52 week high of 44.52), PHDC and JUFO. This buying momentum came after many investors were relieved following the postponement of ousted president Morsi's trial and are now optimistic towards the Constitution. Local and Arab retail investors took advantage of the buying appetite and reverted to some profit taking to end the week as net sellers while foreign investors ended the week as net buyers on above average participation.