African Thoughts: February 03, 2014

Nigeria:

The market came under pressure in Lagos last week with the ASI falling -3.21% as banks continued to fall under the sword with the Bank Index falling -6.20% with all the tier-1 banks closing lower for the week. Activity remained fairly stable as turnover only fell a minor -2.04% to N1.71bn as banking giants Zenith and Guaranty Trust Bank were the most actively traded counters for the week. International Breweries Plc released their 9M-13 results for the period ended 31st December 2013. Revenue was up by 30% yoy to N13.55bn (9M-12 : N10.39bn), while PBT was up by 15% yoy to N2.82bn (9M-12:N2.46bn). In other market news, Oando Plc announced that it would raise its share capital in a bid to facilitate future fundraising needs. Furthermore, the Central Bank of Nigeria (CBN) revealed plans to increase the Chinese Yuan's proportion of the country's external reserves from 2% to 7%.

Kenya:

It was one of the worst weeks from a performance point of view for quite some time in Nairobi last week as the NSE 20 Index fell -4.6% on the back of some heavy foreign selling as foreign outflows amounted to $12.64m. There was no surprise to see Safcom at the top of the list in terms of activity as $13.17m worth of stock traded while the telco continued to come under pressure, falling -11.6% for the week. A few large crosses in Diamond Trust Bank ($12.21m) throughout the course of the week helped boost activity in the usually illiquid name as foreigners were net sellers. EABL came under some serious pressure towards the end of the week and closed lower by -8.8% at KES 259.00. Barclays Bank is expected to start the earnings season with results due on Thursday. Kenya has received a stable outlook rating from global ratings agency Fitch ahead of the country’s $1.0bn-2.0bn sovereign bond offer which is expected in the first half of 2014.

Mauritius:

The theme of market weakness spilled over to Port Louis last week as the Semdex closed -1.3% lower. The two big banks dragged the market lower with MCB falling -2.7% while SBM closed the week -1.9% lower. On a positive note, IBL managed to close the week +1.2% higher and reached a record high of Rs109.75. Despite the shortened trading week due to a public holiday last Friday, activity remained robust with a number of large crosses taking place throughout the course of the week with turnover amounting to $7.0m as foreign investors were net buyers.

Zimbabwe:

Activity surged in Harare last week as value traded amounted to $33.5m on the back of a monster cross in Seedco ($20.m) which was a special bargain involving the proposed sale by Aico to Vilmorin and Cie. Foreigners were net buyers to the tune of $24.1m (on the back of the Seedco special bargain). The market came under pressure with the Industrial Index falling -3.08% as Delta put major strain on the market, falling -7.33% to close at 118.61c.