African Thoughts: October 31, 2016


The ASI fell by a further 1.10% last week (YTD now -4.71%) while volumes remain absolutely atrocious. There is also no real direction in the market. The Banks closed down 44bps with Skye Bank (N0.59, -7.81%) leading the losers chart followed by Diamond Bank (N1.09, -6.03%), FCMB (N1.09, -1.80%) and Guaranty (N23.85, -1.77%). The Consumers gained 29bps thanks to Presco (N43.85, +8.94%), Unilever (N50.00, +8.93%) and Cadbury (N13.60, +3.58%). There were losses in PZ (N16.50, -5.61%), GlaxoSmithkline (N14.92, -5.45%), UACN (N18.68, -3.71%), Flourmill (N19.52, -2.40%) and Nestle (N791.00, -1.13%). Last week also saw a slew of Q3 results get released – these came in the likes of Cadbury, Zenith Bank, CAP, FBN Holdings, Unilever, GlaxoSmithKline, Mobil Oil, Fidelity Bank and ETI.


The NSE 20 ticked up by just 4 bps making the YTD loss now 20.7% for the index. Volumes remain generally lackluster though with a general lack of direction permeating throughout. Once again we saw Safcom dominate the volumes charts with the telco gaining 1% to KES19.90. Banks were mixed with Equity Bank rising by 80bps to KES30.75 and KNCB falling by 90bps to KES27.00. EABL (+2.6%, KES279.00) and KNAL (+16.8%, KES6.60) were 2 of the most prolific gainers on the week. KNAL rose after releasing 2017 H1 numbers.


The Industrials (-1bp) finally stopped its massive recent rally but the index is now up 4.88% YTD. The major reason for the fall was Delta which fell by 9.71% to 72c. This fall is still attributed to the notice that the bottler agreements with Coca Cola are at stake in the wake of changes in the shareholder structure. Despite this fall we saw massive gains in the likes of NatFoods (+36.21%, 300c), OKZim (+24.57%, 5.02c) and Seedco (+24.24%, 82c).


The Semdex fell by 32bps while the Sem-10 closed down 38bps last week. Outside of a couple of crossed in the MCB India Sovereign Bond the market was rather subdued. Performance was also mixed as we saw MCBG slip by 1.4% to Rs217.00 while SBMH closed up 30bps at Rs6.90.

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