African Thoughts: February 15, 2016

Nigeria:

Things got off to a very slow start last week in Lagos, but then we saw a solid pickup in activity, especially on Friday where turnover amounted to a very impressive $44.7m and as such, total turnover for the week increased +37.02% to $86.6m. The increase in turnover was as a result of large crosses in the likes of Seplat, GTB, NB and Nestle. The market managed to close the week higher with the ASI gaining +5.05%, but this was only as a result of some strength in DangCem, as the market heavyweight closed +15.15% higher. DangCem's strong performance last week could be attributed to the announcement that they will be building new cement plants in two communities in the country. The plants are expected to add 9m metric tons per annum to the company's current local output. Banks came under a bit of pressure, with the sector falling -1.14% thanks to losses in ETI (-6.05%) and Zenith (-4.91%). Consumers (-0.015%) closed slightly lower with losses in Guinness (-2.48%), IntBrew (-1.52%) and Nestle (-1.14%).

Kenya:

The market came under pressure, after two straight weeks of gains, with the NSE 20 index falling -1.1% with foreigners recoding net outflows to the tune of $1.9m while foreign participation accounted for 66.8% of activity. EABL was the most active stock over the course of the week and accounted for 27.5% of activity and despite having the highest net foreign outflow ($1.9m) the brewer managed to close the week unchanged at KES 281. Nation Media Group closed the week -3.2% lower, but witnessed the highest net foreign inflows ($725k). After touching a ten-month high, Safcom came under a bit of pressure and closed the week -2.5% lower as foreigners turned net sellers in the telco. The two major banking stocks ended the week mixed with EQBNK gaining +1.9% while KNCB fell -1.3%.

Zimbabwe:

The Industrials fell by a further 82bps last week and is already down a woeful 11.89% YTD. Somewhat surprisingly we saw some small gains in the large caps with the likes of Delta rising by 65bps to 52.5c and Old Mutual which gained 1.78% to 180c. Econet also closed higher at 22.05c (+5bps). We also saw some volumes return particularly in Delta and Econet - foreign participation is still heavily skewed to the sell side.

Mauritius:

The Semdex and the Sem-10 fell by 20bps and 30bps respectively. However, both indices are still positive for 2016 YTD (+2.3% and +2.7% respectively. The main drags on the index were the banks with MCBG falling by 60bps to Rs208.75 while SBMH closed down 2.9% to Rs0.68. On the other hand we saw a good week for the hotels with positive gains for NMH (+4.4%, Rs24.65), Lux (+1.7%, Rs59.00) and Sun (+2.6%, Rs39.00).