July was marked by positive sentiment as African markets loosened the shackles encountered in June. Seven of the eleven markets included in this report ended July in the black, with strong performances seen in a number of markets. Increased trading activity during July has seen numerous international markets lift returns and shrug off some of the negative sentiment that has been slowing trader activity.
Nigeria’s All Share Index led the charge, gaining 6.76% during the month, while Tunisia’s TUNINDEX followed closely, gaining 5.12%. The Kenyan All Share Index fared well, attaining 4.06%, ahead of the 3.27% achieved by the Egyptian EGX30 during July. Namibia’s Overall Index (1.09%), Botswana’s Gaborone Index (0.98%) and Zimbabwe’s Industrials Index (0.72%) performed well, although gains did not keep up with those measured in June.
Morocco’s Casablanca Index lost 2.18% while Ghana’s Composite Index shed a further 1.69% in July. The Mauritian and Zambian markets also fell, with the SEMDEX and Zambian All Share Index losing a respective 1.35% and 1.25%.
The Nigerian market experienced strong performance in a number of sectors, most notably banking and food. Buoyed by strong financial-year numbers, the Nigerian banking sector attracted considerable investor attention with The United Bank for Africa gaining more than 11%, while all other listed banking institutions ended July in the black. Mention of the upcoming takeover of Dangote Flour Mills by South African food producer Tiger Brands impacted on the wider food sector with a number of the food producers returning strong gains.
In line with the new economic direction, the Nigerian government pushed through the new Petroleum Industry Bill with the aim of making the industry more transparent. The new bill will ultimately lead to the privatisation of Nigeria’s state-owned oil company and free large sums for infrastructure investment.
In ties with China Railway, the Zimbabwean government has announced the planned construction of a thermally fired power station that is said will double thermal capacity in the country.
Other announcements included a decision by the Zambian Reserve Bank insisting that all domestic financial transactions be undertaken in the domestic currency, the kwacha. However, the currency’s increased value recently has caused concern among mining operators as competitiveness wanes. In other news from Zambia, China Copper Mines is to deepen investment ties by developing a new copper mining operation north of Lusaka.
As Morocco’s economy slows due to a bad wheat harvest, the release of data indicating rising unemployment and slowed growth has caused investors to shy away from the Casablanca Exchange as a number of companies suffered losses in July.
The Mauritian SEMDEX continued to trend downward in July as hotel and banking stocks declined again. Without any sight of respite within the tourism sector as world markets continue to coast, the SEMDEX continues to lose ground. Copyright. HedgeNews Africa – August 2012.
| Market results | ||||
| Country | Local Index | Local Index (Jun) | Local Index (YTD) | |
| Nigeria | All Share | 6.76% | 11.24% | |
| Ghana | GSE Composite Index | -1.69% | 6.06% | |
| Kenya | NSE 20 | 4.06% | 20.26% | |
| Egypt | EGX 30 | 3.27% | 34.23% | |
| Botswana | Gaborone Index | 0.98% | 4.85% | |
| Tunisia | TUNINDEX | 5.12% | 10.95% | |
| Morocco | CFG 25 | -2.18% | -11.33% | |
| Mauritius | SEMDEX | -1.35% | -7.23% | |
| Zimbabwe | Industrials Index | 0.72% | -8.87% | |
| Zambia | All Share | -1.25% | -8.16% | |
| Namibia | Overall Index | 1.09% | 6.01% |
Data source: Bloomberg
