African Thoughts: September 02, 2013

With the northern hemisphere summer period finally drawing to a close last week, global markets took some strain and this manifested itself in Africa by way of very thin volumes. As per usual we take a look at some of the best and worst performing markets from across the continent.

Mauritius:

The rally continued in the broader market in Port Louis last week with the Semdex gaining 0.40% while the Sem-7 fell 0.02%. The mixed performance was also prevalent in the banking sector with MCB gaining 0.10% to close at Rs193.50 while SBM fell 1.90% to close the week at Rs1.05. Turnover increased to $7.7m with a large cross in PBL (140k shares at Rs202.50) on Wednesday boosting activity. CFS continued its recent rally reaching a record high of Rs8.50 but eventually closing the week at Rs8.24. On a negative note; foreigners were net sellers (mostly in SBM) as foreign outflows totaled $1.86m.

Zimbabwe:

It was another mixed bag in Harare last week with the Industrial Index falling 1.21% (the market has fallen for 4 weeks in a row now) taking the monthly loss for August to -22% while the Mining Index gained 1.23% (-27% for August). Heavy weight stocks continue to weigh down the industrial sector with foreigners still running from the market after the Zanu-PF victory. The market’s two most liquid stocks Delta and Econet fell 1.57% and 1.98% respectively. Another negative was the fact that turnover fell from $8.8m to $7.54m as foreigners remain net sellers in the market. Dairiboard posted a loss of $3.3m in H1 2013 results. With much uncertainty still on the horizon the recent trend (from a foreign perspective) of sitting on the sidelines or liquidating/ reducing exposure to the Zimbabwean market is expected to continue.

Kenya:

Last week saw an increase of foreign inflows ($11.82m), but this however was not enough to prop the market up as the NSE 20 Index fell (-2.6%) for the second week in a row. Kenya Commercial Bank was one of the major drags on the market after a very good run with the banking giant falling 6.7% for the week even on the back of net foreign inflows. Safcom was also extremely active with a number of large crosses going through in the telco, but decline for the second week in a row. The fall in EABL unfortunately continued with the brewer falling 7.8% to close at levels last seen in April. SCAN Group came under pressure after releasing disappointing H1 2013 results with profits slumping 98.3% y/y. Inflation accelerated to 6.7% in August.

Nigeria:

Unfortunately it was once again another very dull week in Lagos from an activity point of view with trading dominated by a number of blocks in a few select names. The market continued to slide with the ASI falling 1.46%. Banking stocks were a major drag on the market with the Banking Index falling 2.69% as second-tier banks took the most pain with the likes of Diamond Bank (-9.09%) and FCMB (-8.21%) being amongst the worst performers. Consumer stocks weren’t spared in the sell-off as the Consumer Goods Index fell 0.84% dragged lower by the likes of Glaxo Smith Kline (-13.97%). There were still a few results being released last week with First Bank posting H1 2013 numbers while Dangote Flour Mills released FY 2013 results. Unfortunately it was extremely quiet on the news front with not much to talk about. We are hopeful that things will pick up over the next few weeks with the northern hemisphere summer now over.

Egypt:

The Egyptian market continues to come under pressure lead by international institutions and local retail investors leaving the EGX30 to end the week down 2.87%. The market traded on very thin volumes relative to recent average turnover, as notable selling was witnessed last week on the back of growing fears with the geopolitical unrest regarding Syria which lead a panic in all regional markets. Retail investors were notable sellers this mainly attributed to margin calls due to the tension in the region, adding to this international investors continue to decrease their exposure in the market. It is worth mentioning that SKPC traded more than 400% of its 30 day average volumes and ended the week higher.