African Thoughts: September 23, 2013

Activity remained light in Africa last week with most global focus on the Fed announcement. Global markets rallied on the back of the announcement of the delay in any tapering, and African markets typically followed suit. Although it must be noted that volumes have remained light, as they have for the whole of September. Over the weekend the horrific attacks in the Westgate Mall in Nairobi has dominated news flow.

Zimbabwe:

Most government ministries started operations during the week with the first parliamentary session taking place during the week as well. The Industrials Index ticked higher steadily as bids in the large cap names drove the market higher. The Industrials ended the week higher by 2.22% and it was also interesting to note that we had for the first time since the elections a situation whereby foreign investors were net buyers (opposed to being net sellers) for any one session. After weakness early in the week Econet rallied to 55.01c at the close on Friday (+2.82% for the week). OK Zim gained an impressive 12.5% to close the week at 26c while BAT gained 10% to 1100c. Delta closed the week effectively unchanged at 120c.

Nigeria:

The Nigerian ASI gained a modest 25bps for last week. It was typically another very slow week although the initial reaction on Thursday (after the Fed announcement on Wed night) was positive with both market sentiment and trading volumes significantly improved. Sadly, this was short lived as Friday’s session fell into the dull recent pattern. Banks were the main reason for the index outperformance as the sector gained 46bps while consumers fell by a very modest 7bps. The biggest gainer in the banks was UBA which gainer 9.22% for the week to N7.70 while we also saw active trading and solid gains in UACN (+11.54%, N60.80) and Transcorp (+11.11%, N1.50). Guinness Nigeria released results on Monday afternoon which slowed poor (yet expected) results. The name closed the week pretty much unchanged at N248.

Egypt:

The market ended the week in positive territory to continue with its bullish trend leaving the EGX30 to end the day up 74bps. Market volumes remains weak yet with a notable improvement in recent sessions. The market managed to pick up its bullish trend albeit on low momentum after witnessing some minor profit taking the week before. Local retail investors continue to be net buyers along with GCC investors in names such as EKHO, ACGC and ETEL. Local institutional investors continue with their profit booking sentiment targeting names such as HRHO, TMGH and COMI.

Kenya:

The NSE 20 gained a very modest 5bps for last week. Foreign buying drove some of the large caps with Safcom touching an all-time high of KES 8.70 (before settling at KES 8.50 for the week, up 6.25%). Part of the reason for the strength was the announcement of company plans to increase capital expenditure by 8% for FY through to end of March. Equity Bank and KNCB closed up 1.5% and 2.27% at KES 33.75 and KES 45 respectively. EABL also gained a solid 3.67% to KES 304. The terrible attack on the Westgate Mall over the weekend has clearly overshadowed all market activity as both local and foreign investors digest the horrible news.

Mauritius:

The Semdex gained 90bps last week while the large cap Sem-7 gained a solid 1.1%. Hotels and banks both showed impressive gains with NMH (+8.1%, Rs80.00), Sun Resorts (+7.6%) and Lux (+5.2%) all showing strong buying for the week. The 2 main banks also rose with MCB (+30bps, Rs193.50) and SBM (+1%, Rs1.01).

Francophone Region:

The BRVM slipped slightly last week as the market finally moved towards continuous trading. Some hiccups were experienced as local participants as well as local custodians, etc get to grips with the new logistics. Despite the slight dip the BRVM Comp and BRVM 10 are still up 22.03% and 20.78% respectively. Sonatel fell by 2.7% to XOF 18,000.