African Thoughts: November 12, 2012

With two very important global events taking place last week, namely, the United States Presidential elections and the changing of the guard in China a few days later African market participants seemed content to largely sit on the sidelines and to see how things panned out. Below is a list of some of the best and worst performing markets across the African continent from last week.

Egypt:

After taking a hit in the previous week due to the court’s ruling that the contract between Centamin and the Egyptian government on the Sukari Gold Mine was void, the Egyptian market managed to rebound and was the best performer on the continent with the EGX 30 gaining 2.97%. Ghabbour Auto reported Q3 2013 numbers last week which were slightly worse than expected as a result of some supply constraints. On the economic front, net international reserves for October increased to USD 441m.

Kenya:

The Kenyan market put in a rather satisfactory performance last week with the NSE 20 Index gaining 0.8%. Safcom reported rather stellar 1H 2012 results which saw PAT increase 93.7% with the counter managing to post a 10% gain on the week, closing at 4.80. Banking giant Equity Bank reported pleasing 3Q 2012 results which saw PAT increasing 14% with the name gaining 1% for the week. Kenya Airways came under some pressure after reporting disappointing 1H 2012 results showing an EPS loss of KES 3.20. The MPC held its meeting last week and decided to cut the Central Bank Rate by 200bps to 11.00% as inflationary pressures continue to subside.

Nigeria:

Activity in Nigeria was rather dull last week but the market did manage to close in positive territory with the ASI gaining 0.60%. On the corporate front Guinness released rather disappointing 1Q 2013 numbers which saw PAT fall to N1.807bn. Trading in IBTC was placed on full suspension last week following the restructuring of the company into a holding company which will see it being broken down into various subsidiaries.

Zimbabwe:

The Zimbabwean market ended the week mixed (which often seems to be the case these days) with the Mining Index being the continents worst performer and falling 6.43% while the Industrial Index managed to gain 0.21%. Activity slowed down drastically with turnover falling 76% to $2.9m for the week. Delta rallied an impressive 2.29% to close at 95.25c after reporting interim results with revenue growing 18% to $299.6m and declared a dividend of 1.17c per shares. Finance Minister Tendai Biti gave the banks an ultimatum, stating that they should support the Reserve Bank’s Treasury Bills or be compelled to do so through negotiable certificates of deposit.

Mauritius:

Mauritius ended the week slightly lower with the Semdex falling 0.1% to close at 1,659.36. Bramer Bank and Rogers were the biggest drag on the market, falling 11.4% and 3.9% respectively. There was high foreign demand in Cim Financial Services to the tune of 12.7m shares being purchased in the counter. The Minister of Finance Honorable Xavier Luc Duval gave the country’s budget last week which saw GDP for 2012 forecast to grow at 3.4% and 4% for 2013. The budget deficit for 2012 is expected to be 2.5% while inflation is expected to be 4.1%. On the negative side, unemployment is expected to be 8%.