African Thoughts: October 24, 2016

Nigeria:

Interest continues to wane in Lagos with turnover falling -17.51% to a dire $24.22m. One of the main contributing factors to investor apprehension is the disconnect between the black market rate for the Naira and the official rate with the black market rate trading at ca. 455 to the USD while the official rate is ca. 316 to the USD. Unfortunately with volumes being so low, there are no names worth mentioning from an activity point of view. The market closed the week lower with the ASI falling -0.95% (YTD (-3.65%) with consumers stocks the hardest hit as the sector fell -1.94% thanks to Cadbury (-16.21%), GSK (-14.19%) Guinness (-3.61%) and NB (-2.49%). Banking stocks also closed the week lower with the sector falling -0.50% with losses in UBA (-9.15%) and Zenith (-1.67%). There was more bad news, with inflation accelerating to +19.9% for September.

Kenya:

It was another dire week from an activity point of view, which was exacerbated by the shortened trading week due to the public holiday last Thursday, with turnover falling -60.2% to $11.4m. The feeling that the market was barely trading was only made worse by the fact that Safcom accounted for 41.3% of total turnover last week. Foreigners turned net buyers to the tune of $209k for the week, while their participation fell to 59%. The market came under some pressure last week with the NSE 20 Index falling -2.0% (YTD -20.7%) thanks to losses in EABL (-2.5%), EQBNK (-1.6%) and Safcom (-1.3%).

Zimbabwe:

The locally driven rally continued unabated last week with the Industrials rising by another 7.53% thereby pushing the YTD gain to 4.89%. Among the large caps, we saw significant gains in Econet (+14.64%, 30c – a 2016 high), Delta (+12.18%, 83c) and OK Zim (+15.80%, 40.3c). Delta did touch a weekly high of 85c before a slight weakness on Friday after releasing a cautionary on the notification from the Coca Cola Company on the intention to terminate bottler’s agreements with them following shareholder changes in the group (after SAB Millar and AB InBev merger).

Mauritius:

The market closed the week lower in Port Louis with the Semdex falling -0.27%, cutting the YTD gain to +0.54%. It was a very active week in Port Louis, with turnover amounting to $14.9m thanks to crosses in MCB India Sovereign Bond, CIEL and MCBG which together accounted for 77.6% of turnover. MCBG managed to close the week +0.50% higher while SBMH resumed trading on Thursday after a reverse-share split. Hoteliers had a mixed week with LUX gaining +0.8% while SUN and NMH fell -2.1% and -0.50% respectively.