African bourses mirror Europe’s pessimism

Confidence and optimism dried up as November came to a close with African markets in retreat. International markets fared similarly with pessimism taking hold as European negotiations stumbled.

Namibia’s Overall Index had the strongest month amongst African markets, gaining 3.24%, while Zimbabwe’s Industrial and Zambia’s All Share Indices attained 0.98% and 0.55% respectively. The only remaining market in the black was Tunisia’s TUNINDEX, which gained 0.37% in November.
The biggest loser for November was Kenya’s NSE 20, which shed 10.03%. Egypt followed closely dropping 9.68%, while Nigeria’s All Share slipped 4.5%. Morocco’s CFG 25 Index was down 3.27%, Ghana’s Composite (-2.04%), the Mauritian SEMDEX (-1.01%) and the Botswana Gaborone Index (-0.17%).

Kenya’s NSE 20 Index dropped significantly as the Kenyan Central Bank raised the policy rate to 18%, up 150 basis points. The move was in response to the worsening inflationary circumstances with CPI rising to 19.72% in early November.

Utilities and financial stocks suffered the greatest losses with the worst hit being Kenya Power and Lighting and Equity Bank falling 8.2% and 6.7% respectively in the week ending November 2.
Although Egypt’s EGX 30 ended November on a stronger note due to the successful running of the national elections, a lacklustre performance earlier in the month held the market firmly in the red.
 With a strong running by the Islamist Freedom and Justice Party, investors appeared slightly less risk-averse as they returned to the market in the final week of November. Commercial International Bank rose 12.4%, while EFG Hermes and Ezz Steel managed to recover 12.2% and 10.4% respectively.

As in the case of Egypt, Morocco concluded a successful election with the moderate Islamic Justice and Development Party gaining the largest parliamentary sitting. In recognition of these results, however, the market slowed, losing 3.27% through November.

Rounding up the North African region, Tunisia’s TUNINDEX managed a meager 0.37% rise on the back of profit-taking, a result of the peaceful elections.

A recovery in dual-listed stocks on South Africa’s JSE helped Namibia’s Overall Index become the biggest gainer for November. The final week of November saw Shoprite jump 9.1% with Old Mutual and Bidvest rising 4.3% and 3.4% respectively.

Namibia also issued its first 10-year eurobond, at US$500 million and offering a 5.75% return. 
The negative sentiment coming out of the European recession is having a large knock-on effect on the Mauritian SEMDEX as tourism stocks slid through November. The banking sector also ended the month softer as investors sought safe-havens.

There were some strong returns in Zimbabwe as Econet Wireless gained 7.7% and Innscor and Seed Co. followed suit, adding 5.8% and 4.8% respectively.

Sierra Leone made headlines as Bloomberg reported a forecast 50% growth rate for the country in 2012 on the back of new iron ore mines, making it the fastest growing economy. Rates are expected to slow to approximately 10% in 2013 and 2014. Copyright HedgeNews Africa – December 2011


Market results        
Country Local Index Local Index return (Oct) Local Index (YTD)
Nigeria All Share -19.24% -4.5%
Ghana GSE Composite Index -0.5% -2.04%
Kenya NSE 20 -28.81% -10.03%
Egypt EGX 30 -43.71% -9.68%
Botswana Gaborone Index 8.51% -0.17%
Tunisia TUNINDEX -8.42% 0.37%
Morocco CFG 25 -13.65 -3.27%
Mauritius SEMDEX -5.26% -1.01%
Zimbabwe Industrials Index -4.16% 0.98%
Zambia All Share 13.88% 0.55%  
Namibia Local Companies Index -3.15% 3.24%