African Thoughts: December 10, 2012

Zimbabwe:

Both Zimbabwe indices were among the worst performers across Africa for the past week as the Industrial index closed down 1.01% and the Mining index continues to fall closing -4.07%. The Mining index is now down a woeful 34.52% for 2012. It is also notable how market participants are starting to get into the festive spirit as volumes remain low with most of the market activity dominated by local investors. Foreign interest remains firmly rooted to the large caps like Econet, Delta, Innscor, etc.

Nigeria:

A small improvement in the ASI by 67bps for the week as market turnover remains muted. As always, most of the action was focused on 2 sectors, viz Banking and Consumers. The Banking sector grew by 2.37% while the consumers grew by 2.26% for the week. The consumer sector accounted for some of the top performing stocks, including Guinness (+4.74%), Nestle (+1.53%), Nigerian Breweries (+2.33%), PZ Cussons (+4.77%) and Cadbury (+4.40%) while GTB (+4.60%) and Zenith (+2.95%) were the top performing banks for the week. Stanbic remains a big negative on the banking sector as it closed down 9.09% for the week. Wapco, Ashaka Cement, Dangote Cement and Flour Mills all had negative weeks.

Botswana:

The DCI was slightly soft as it closed down 56bps for the week. Letshego was the biggest faller for the week, closing down 9t at 196t after some recent strength. The banks, FNBB and ABCH also fell, dropping 5t and 10t respectively. The top performers for the week were Sechaba (up 5t) while Engen and Stanchart both closed up 1t.

Egypt:

The Egyptian market continues to be an exciting one to follow as what seems like each day brings a fresh bout of news. It was a long week with tension at a peak for much of the week as clashes between supporters and opposition of the President’s decree continue. Despite the fact that the decree was condemned by the UN, many governments and international civil rights groups, the EGX closed up for the week. Most of the week was characterized by good performance until Thursday when the market fell 4.61%. The latest news over the weekend was that President Mursi revoked the decree to broaden his powers – time will tell how the market reacts to this.

Kenya:

The NSE continues to drop with the NSE20 shedding 1.1% while market turnover for the week fell 32% from the previous week. Pleasingly, foreign flows improved somewhat by 15% week on week. As usual, the blue chips saw most of the focus with Safcom, EABL and Equity Bank the most active along with some block action going through in Stanchart and Bamburi Cement. News out from the World Bank was that they cut Kenyan economic growth forecast to 4.3% in 2012 (down from 5%) as the effects of high lending rates takes hold.

Mauritius:

A pleasing week in Mauritius as the Semdex (+1.6%) and the Sem-7 (+2.4%) both rose. The strong +5.7% in SBM was the main driving force behind this. Local experts assign the SBM strength to the fact that the AGM will be held shortly during which it is likely that a 100:1 share split will be approved. The banking strength didn’t end there, with MCB up 2.5% driven higher by foreign investors. The main talking point in the hotel sector was a massive cross in NMH of 5.1m shares which caused the name to close down 2.6% for the week at Rs55.50. Sun Resorts closed unchanged at Rs27 while Lux Island closed up 70bps at Rs15.10.

Francophone Region:

Despite a slightly soft week (-47bps) in the BRVM region last week, both indices have performed solidly this year. BRVM comp is up 15.83% YTD while the BRVM10 is +11.66% YTD. Transport was the biggest gainer for the week led higher by Movis while Telecoms was up 2.06% which was mainly driven by Sonatel (+4.17%) as the name continues to be in demand following the share split. Agro-processing dropped by 5.31% as PALMCI (-8.08%), SAPH (-7.75%) and SOGB (-5.17%) all fell on the back of investor concerns about the fall in the international price of palm oil and rubber.