African Thoughts: January, 2017

Nigeria

It was a solid month from a performance point of view in Lagos with the ASI gaining +6.47%, trimming the YTD loss to -6.17%. The move higher was as a result of a strong performance in banking stocks, with the sector gaining +7.78% thanks to the likes of GTB (+9.05%), Zenith (+6.88%), UBA (+4.65%) and ETI (+4.26%). Consumers closed the month in negative territory with the sector falling -1.14% with some weakness in Unilever (-27.08%), Cadbury (-7.05%) and Guinness (-6.69%). It was a better month in terms of activity, but still well below par, with turnover increasing +48.92% to $152.20m. We expect the lack of interest from foreign investors to continue until the FX backlog is sorted out.

Kenya

It was a rather woeful month to end a year to forget in Nairobi with the NSE 20 Index falling -1.90%, taking the YTD loss to -21.1%. Market heavyweights KNCB (-4.2%), Safcom (-3.8%) and EABL (-1.6%) all closed the month in negative territory and were drags on the overall market. It was also a rather painful month in terms of activity with total turnover for the month falling to a very dull $70.02m. Safcom ($24.44m) completely dominated proceedings while there was some small activity in EABL ($13.16m), EQBNK ($9.12m) and KNCB ($7.54m). On the positive side, foreigners were net buyers to the tune of $6.03m. It is set to be a very interesting year in Kenya with the national elections set for August 2017.

Zimbabwe

It was a rather impressive month from an activity point of view in Zimbabwe as turnover increased +10.81% to $25.99m as foreigners continued to be net sellers to the tune of $10.86m, while local investors continued to buy shares as a result of the bond notes. The market also continued to rally as a result of the bond note issue with the Industrial Index gaining +5.43% for the month, taking the YTD gain to a rather impressive +26.28%. There were some good gains in the likes of OK Zim (+34.22%), Innscor (+26.32%), Delta (+4.73%) and NatFoods (+2.93%), while Econet fell -5.42%.

Mauritius

It was an extremely average month from an activity point of view in Mauritius with total value traded for the month amounting to $20.19m. The sluggish feeling of the market was further compounded by the fact that MCBG accounted for 47.6% of total turnover, while SBMH and NMH were very quiet. On the positive side, foreigners were net buyers to the tune of $660k, as a result of being net buyers in MCBG ($1.26m). The market closed the month slightly higher with the Semdex gaining +0.32%, trimming the YTD loss to -0.15%. Market heavyweights NMH and MCBG closed the month +1.07% and +0.35% higher respectively while SBMH closed -1.78% lower.

Please note that the index figure above is correct at the time of writing.

Egypt

• EGX30 advanced a further 7.79% in December on ADV $77.4mn
•  The index resumed its northern journey following floatation to reach all-time highs@ 12,534 before fading away
•  Foreigners remained net buyers throughout the month of USD125mn @ avg participation of 11%
•  The market saw the offering of another consumer name, Obour Land (OLFI EY), which debuted @ 9.68/share but closed lower
•  China and Egypt signed a 3-yr currency swap deal of 18bn Yuan ($2.62bn)
•  EGP weakened further to c19.70/USD before strengthening towards end of month to EGP18.14/USD.