African Thoughts: February, 2017


It has been a woeful start to the year in Nigeria with the ASI already down -3.12% in January. Consumer stocks were the major drags on the market with the sector falling -7.21% thanks to some heavy losses in Guinness (-22.76%), 7UP (-13.10%), Nestle (-10.25%), Cadbury (-8.26%) and NB (-5.53%). A few of the names have released negative results with their bottom lines being affected by import costs after the slide in the local currency. Banking stocks managed to buck the trend and closed the month +1.09% higher thanks to good performances in Zenith (+6.44%) and UBA (+6.0%). It was another slow month on the activity front with turnover increasing +2.5% to $156.01m as foreign investors remain on the sidelines as a result of the FX liquidity crises. The Central Bank of Nigeria kept the Monetary Policy Rate at 14% at its latest meeting in January.


The negative sentiment of 2016 has spilled over into 2017 with the Kenyan bourse taking a massive knock in January as the NSE 20 Index closed -12.3% lower. In terms of the market heavyweights, the two major banking stocks continued to push the market lower with KNCB and EQBNK falling -20.0% and -19.2% respectively. Both EABL and Safcom were not spared in the selling frenzy with the former falling -8.2% after releasing disappointing H1 2017 numbers while Safcom closed -3.4% lower. To make matters worse, things were slow going on the activity front with total turnover for the month amounting to $116m, which is an average daily turnover of $5.52m. Safcom completed dominated activity and accounted for $42.8m of turnover while EABL was a distant second at $26.6m. On the positive side, foreigners were net buyers to the tune of $15.55m. The Kenyan Central Bank kept the benchmark rate unchanged at 10% at its latest meeting in January.


It has not been the best start to the year in Harare with Econet announcing plans for a rights issue and Delta releasing a disappointing trading update. As such, the Industrial Index fell -2.97% in January with Econet being a major drag on the market and falling -43.77%. It was also a very disappointing month on the activity front with turnover falling -67.1% to a very dull $8.55m for the entire month. According to local reports, National Foods is now operating at full capacity at its mills after seeing demand surge following the introduction of import controls by the Government.


There was some light at the end of the tunnel as far as Africa is concerned with the Mauritian bourse managing to close the month in positive territory as the Semdex gained +4.0%. Hoteliers had a very strong month with NMH gaining +12.2% while SUN closed +10.7% higher. The two major banking stocks also had a good month with SBMH and MCBG gaining +6.63% and +3.26% respectively. The move higher should however be taken with a pinch of salt as activity was rather muted with total value traded for the month amounting to $16.56m. To make matters worse, MCBG and CIEL together accounted for 52.3% of activity, further compounding the dull feeling of the market. Foreign investors were net sellers to the tune of $2.29m.

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


•  EGX30 advanced a further 2.65% on ADV $78.5mn
•  The market continued trading higher to record all-time high @ 13,436pts, before coming off towards end of month on talks of re-imposing stamp duty tax.
•  Foreigners remained net buyers of $88mn, while locals were sellers
•  GTH announced a 10% share buyback @ EGP7.90/share to support the cancelation of the GDR program
•  EGX30 announces semi-annual re-balancing changes (effective beg of Feb):

Dropped: EFID, EKHO, UEGC and AIND


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