Africa investor Ai40 Weekly Commentary - 6 March 2017
Monday, 06 Mar 2017
It was the second week of downward movement of the Ai40 Investor’s Index. Mining and oil & gas stocks dragged the index down while banking and telecoms equities were the top gainers. The Index fell by 40 basis points; a drop of 0.42% from last week’s value of 93.33. The index closed Friday at a value of 92.93.
In US markets, the Federal Reserve was in play last week as an interest rate hike for March was all but confirmed. The US dollar and major stock indexes both rose over the week before slipping on Friday due to profit taking according to Nasdaq.com. The S&P 500 and NASDAQ posted their sixth consecutive week of gains last week. On the global front, stocks traded mostly lower on Friday as international markets tracked US markets. In Europe, investors also mulled the rate hike in the US while "private sector business activity rose at its quickest pace in nearly six years" according to Investopedia. Although they were lower on Friday following disappointing company updates, European equities recorded their best weekly gains of 2017.
At Friday’s close, the Dow Jones Industrial Average was up 0.1%, or 2.74 points, to close at a value of 21,005.71; the Index broke over the 21000 mark last week for the first time. The Nasdaq Composite Index gained 0.16%, or 9.53 points, to end the session at 5,870.75. The S&P 500 was up 0.05%, or 1.20 points, to close Friday on a value of 2,383.12. The MSCI global stock index rose 0.25% for the week.
Banking and Telecoms stocks (particularly from SA & Nigeria) were the order of the day on the Top Gainers list. JSE-listed Standard Bank was the top performer last week after posting a gain of 8.5%; the firm reported a 4% rise in full-year profit according to CNBC Africa. Telecoms giant, MTN gained a modest 3.6%. This was despite the company posting its first annual loss ($108 million) in two decades following the payment of a fine to regulators in Nigeria which "wiped a third off its earnings" according to Financial Times.
In Nigeria, equities for Standard IBTC Bank and Guaranty Trust Bank were up 3.3% and 2.9% respectively over the week. Further North on the continent, stock for Maroc Telecom - the main telecommunications company in Morocco - rose 1.8%
Oil & gas firm, Tullow Oil was the biggest loser last week as the stock dropped by a massive 18.1%. Shares for AngloGold Ashanti were in similar territory with a loss of 11.5% over the week, marking a drop over two consecutive weeks on the index. According to Nasdaq.com, "gold mining stocks have been down trending for the last two weeks" albeit at varying degrees depending on how they are leveraged to changes in gold price.
Cairo-listed Abu Qir Fertilizers and TMG Holdings were down 7.2 & 7% respectively and Guinness Nigeria dropped by 6.9%.