Africa investor Ai40 Weekly Commentary - 20 March 2017
Monday, 20 Mar 2017
As at Friday’s close last week, mining shares which had dragged the Ai40 Investor’s Index downward over the past two weeks, found some redemption as the "Three Anglos" were the top performers on the Index. South African equities took up four of the five spots on the Top Gainers list. The Index rose by an impressive 2.51 points; a gain of 2.7% from last week’s value of 91.82. The Index closed Friday at a value of 94.33.
On the global front, equity markets were hovering around record highs on Friday following an eventful week where the US Fed and China both raised rates; signalling growing confidence in a stronger global economy. Investors also anticipated the G20 meeting of finance and economic ministers in Germany over the weekend, where a key issue on watch was the US’s stance on trade. With two extra rate hikes expected this year in the US, government bonds and the dollar edged lower while stock markets posted a mixed performance on Friday as financial and health equities negatively impacted markets according to CNBC. Oil prices moved to close the week higher following a period where the commodity had touched lows last seen in November. On Friday, U.S.-traded crude oil traded at $49.04 a barrel.
At Friday’s close, the Dow Jones Industrial Average was in negative territory and lost 0.10%, or 19.93 points, to close at a value of 20,914.62. The Nasdaq Composite Index closed flat and ended the session at 5,901.00. The S&P 500 was down 0.13%, or 3.13 points, to close Friday on a value of 2,378.25. In Europe, France's CAC 40 lost 0.1% to 5,007.66, while Germany's DAX gained 1.1% to 12,028.09. Britain's FTSE 100 was up 1.05% to 7,418.84.
As mentioned above, South African stocks dominated the Top Gainers list last week; and the Three Anglos stole the show exhibiting some notable gains - considering these equities were all on the Losers List last week. Shares for Anglo American topped the list with a positive weekly price change of 13.2%. Anglo Platinum and AngloGold Ashanti also came in with hefty gains of 11.9% and 11.4% respectively. News broke last week that Indian billionaire Anil Agarwal would take on a 12% stake (valued at $2.5 billion) in Anglo American, sparking speculation of new M&A activity in the mining sector.
Johannesburg-listed MTN Group gained 8.5% as the new CEO, Rob Shuter took the helm last Monday. In Nigeria, Guaranty Trust Bank was up 7.6%.
On the other end of the spectrum, Telecom Egypt was down 5.2% as the state-owned landline company reported an 11% drop in 2016 net profits according to Reuters. Lagos-listed Zenith Bank posted a 4.2% drop over the week, despite ending "its 2016 operations with the strongest growth in revenue and profit in four years" according to The Cable in Nigeria. Stocks for Barclays Bank Kenya were trading 3.7% lower at Friday’s close and shares for building materials firm Lafarge, were down 3.4%.