African Thoughts: November 18, 2013

A mixed week globally last week while in Sub Saharan Africa we witnessed a very dull week. Volumes were generally low while foreign investors mostly absent as local participants were the main drivers of the respective bourses.

Zimbabwe:

Results season continues in Harare so despite the persisting low volumes most focus was on digesting the various results. The Industrials index rose by 1.78% with a large chunk of this gain attributed to Delta (+5.7%). Delta announced their H1 results which showed a 12% increase in profitability – which was more than the more modest 5% gain in revenues which shows improved efficiencies. These were better than estimates hence the strong performance. In general, the market remains quiet with most stocks well bid and a total lack of sellers around. Econet closed the week marginally down at 61c.

Nigeria:

In Lagos we saw an extremely dull week as foreign participants were largely absent. The index ambled along sideways with no real catalyst to drive the market in either direction. In fact, the biggest talking point was the incredible 61% rise in Transcorp! The name traded limit up each day and each day closed net bid in big size. A large chunk of this demand is coming from local investors as the outlook for the name looks positive (good recent investments to increase their plant capacity; hospitality business increasing with Lagos hotel). The major sectors Banks and Consumers both were rather mixed and uneventful for the week. Oando gained a solid 9% to N12 after releasing results during the week while Wapco found some strong buying and closed up 6% at N111.30.

Egypt:

The market witnessed further profit taking last week lead by international and GCC institutions, leaving the EGX30 to end the week down 2.89%. The market did however trade decent volumes compared to recent average turnovers. Notable profit taking was mainly from international and GCC institutions who targeted names such as COMI, HRHO and TMGH after these names witnessed decent strength the week before, yet it’s worth mentioning that the market witnessed a slight rebound during the week when the EGX30 managed to start gaining from a low of 6,242.10 points where names such as ESRS, GTHE and HRHO managed to regain some of the losses.

Kenya:

The Nairobi bourse gained 50bps in an uninspiring week. Most of the demand and activity was from local participants and was notable in how much quieter the volumes were as foreign investor inflows dropped almost 100% from the previous week. Performance across the blue chip names was mixed. KNCB lost 50bps while Equity Bank gained 2.9% to KES 46 and KES 35.25 respectively. EABL lost 1.2% to KES 319 while Safcom gained 1% to KES 9.85. There was some large local trades in I&M Bank as the name closed unchanged at KES 112 but on large volumes.

Mauritius:

A slow week in Port Louis although the Semdex did gain a marginal 50bps for the week. It was mainly thanks to some strong outperformance on Friday that we saw the market gain as SBM rose to Rs105 (+4%) albeit on low volumes while MCB rose 50bps to Rs205. As was the case with the other SSA bourses, market activity was dominated by local participants.

Francophone Region:

The BRVM was closed on Friday due to a public holiday but despite just a marginal increase for the week the BRVM Comp and BRVM 10 indices are up 31.58% and 28.56% YTD respectively. Last week Sonatel shed 1.03%.