Africa investor Ai40 Weekly Commentary - 13 February 2017
Monday, 13 Feb 2017
Continuing on a downward trend, the Ai40 Investor’s Index endured another week of declines. Banking stocks were the main feature of the Gainers list in the last session and Nigerian equities featured heavily on the Losers list. The Index edged down by 29 basis points; a drop of 0.31% from last week’s value of 93.24. The Index closed Friday’s session at a value of 92.95.
Over the course of last week, global markets tracked US markets. According to The Globe and Mail, "A key index of global equity markets rose to a 20-month high on Friday." The Nikkei picked up 2.43% while the FTSE 100 gained 0.93% and Germany’s DAX rose by 0.13%. In the US, the key stock indexes ended the week at record highs as President Donald Trump promised to release details of his much anticipated tax reform plan. Strong earnings reports - particularly by mining and energy companies - also contributed to the rally in equities. Meanwhile in Europe, Greece’s debt woes have been renewed after the IMF "warned the targets prescribed for it to qualify for European bailout cash are unrealistic" according to iafrica.com.
At Friday’s close, the Dow Jones Industrial Average rose by 0.48%, or 96.97 points, to close at a value of 20,269.37. The Nasdaq Composite Index gained 0.33%, or 18.95 points, to end the session at 5,734.13. The S&P 500 was up by 0.36%, or 8.23 points, to close Friday on a value of 2,316.10.
Banking stocks dominated the Gainers category last week, however, Tunisian holding company Poulina Group Holding topped the group with a substantial increase of 16%. After a disappointing performance in previous weeks, investors fancied the stock for Telecom Egypt during the last session as the company gained 12.4%. Shares for Barclays Bank Kenya were amongst the top five Gainers for the second week in a row as the bank gained 11.1%. According to News Ghana, stock for Barclays Bank Kenya was the most heavily traded counter in the financial sector on the Nairobi Securities Exchange (NSE) last week.
Still in the banking sector, shares for Commercial International Bank (Egypt) and Equity Bank Limited (Kenya) rose 9% and 8.3% respectively.
Nigerian equities took up most of the slots in the Losers list last week. First Bank Nigeria lost a hefty 12.4% despite being "named the most valuable banking brand in Nigeria" according to Premium Times. Stock for Ghanaian-listed Tullow Oil suffered an 8.3% drop. The global oil group reported a pre-tax loss of $597 million in 2016 due to write-offs and impairments. This week, two breweries listed in Nigeria found their way to the bottom of the heap. Equities for Nigerian Breweries and Guinness Nigeria Plc decreased by 8.1% and 4.3% respectively.
Finally, JSE-listed MTN Group dropped 3.2% as the telecoms giant is expected to report a loss in 2016 due to a regulatory penalty of $1 billion imposed on the group by Nigerian authorities. According to a statement released by the company, "the fine is expected to have an estimated negative impact of approximately 474 cents on HEPS and EPS, respectively."