African Thoughts: October 22, 2012

With world markets trading tentatively ahead of a few event risks on the horizon and most importantly the U.S Presidential elections in two weeks’ time, African markets seemed to slow down towards the end of the week with trading dominated by a few large crosses in specific markets. Below is a list of a few of the best and worst performing markets across the continent.

Zimbabwe:

As is often the case in Zimbabwe the two major Indices ended the week mixed with the Industrial Index being one of the best performers on the continent from last week and managing to gain 2.57% while the Mining Index was one of the worst performers and fell 0.97%. Heavy weight stocks Delta, Econet and Innscor helped lead the Industrial Index higher with all counters continuing to extend their rather impressive gains. The Mining Index was dragged lower by Rio Zim with the counter falling 60 cents. On the news front, the Zimbabwe Revenue Authority surpassed its revenue collecting target for the third quarter of 2012 by 0.1% (total collections of $823.4m).

Egypt:

Egypt put in a rather decent performance last week with the EGX gaining 1.39%. Volatility continued throughout the week in Egyptian blue-chips as local retail investors along with local institutional investors continued to decrease their exposure to the market, yet international investors and GCC investors continued to be buyers. OTMT managed to gain a notable buying sentiment; this came after news that France Telecom to pay 110m to OTMT for Mobinils contract transfer. Please note that due to the Eid celebrations the market will be closed from Thursday October 25th to Sunday October 28th.

Kenya:

Kenya’s rather impressive run continued last week with the NSE 20 Index gaining 0.98% to close at 4,034.07. With regards to activity, Safcom, Equity Bank and Mumias Sugar were amongst the most active stocks last week helping boost liquidity with foreigners very active in the likes of Safcom and Equity Bank. Uchumi released FY 2012 results last Wednesday with PAT falling 29.93% as the name came under pressure falling 2.84% to close the week at 18.80. Kenya Power is expected to release FY 2012 results in the next two weeks. Union leaders have asked parliament to declare the sacking of 587 Kenya Airways employees illegal and order their immediate reinstatement.

Nigeria:

The Nigerian market closed the week rather flat with the ASI gaining 0.03% to close at 27,926. Activity was rather robust at the beginning of the week with things slowing down towards the end of the week as investors decided to take stock with regards to a number of the Q3 results that were posted. GTB , UBA and Access all released Q3 numbers which saw PAT increase 59%, 47.5% and 156.88% respectively. On the news front, inflation slowed to a 9-month low of 11.3%. Fitch Ratings has affirmed Nigeria's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'BB-' and 'BB' respectively with a Stable Outlook. The agency has also affirmed Nigeria's Short-term foreign currency IDR at 'B'. The Country Ceiling has been affirmed at 'BB-'.

Zambia:

Zambia was one of the worst performers last week with the LuSE falling 0.96% taking the yearly loss to -8.7% with the All Shares Index closing at 3,688. Airtel was the major drag on the Index with the counter falling 5.8%. Standard Chartered Bank announced plans to issue 170,100,000,000 bonus shares at a rate of 10 new shares for every 39 shares held in order to comply with the new capital requirements issued by the Bank of Zambia.