companies & markets

Africa investor Ai40 Weekly Commentary - 7 August 2017

Monday, 07 Aug 2017

After notching gains for four consecutive weeks, the Ai40 Investor’s Index finally cooled off and ended last week in negative territory. Telecoms and mining stocks tracked by the Index performed exceptionally well, while Nigerian-listed equities experienced a heavy sell-off. The Index fell 2.15 points, a drop of 2.13% from last week’s value of 100.58, to close Friday at a value of 98.43.

In US markets, the stronger-than-expected non-farm payroll numbers gave stock markets a boost on Friday. According to CNBC, "the U.S. economy added 209,000 jobs last month, according to the Labor Department, well above the expected gain of 183,000." The Dow Jones Industrial Average broke the 22000 point for the first time ever, led by gains in large-cap banking stocks. Reuters analysts suggest that the jobs report may pave the way for the Fed to announce plans to cut down its $4.2 trillion bond portfolio in September, and could reinforce its case to hike rates for the third time this year in December. Global markets were mixed at Friday’s close, as the pan-European Stoxx 600 gained 0.95% while "Shanghai’s index fell amid news that U.S. is considering investigating China’s demands that American companies share more of their advanced technology" according to Times Colonist.

At Friday’s close, the Dow Jones Industrial Average was up 0.30%, or 66.71 points, to close the week at a value of 22,092.81. The Nasdaq Composite Index gained 0.18% or 11.22 points, to end the week at a value of 6,351.56. The S&P 500 closed the week higher by 0.19% or 4.67 points, to close Friday on a value of 2,476.83.

Gainers
Orange Egypt enjoyed huge gains last week (coming from being the worst performer in the last review). The stock gained 14.4%. JSE-listed miners Anglo American and Anglo Platinum also enjoyed upward price movements last week, with increases of 3.3% and 2.1%. Anglo American’s diamond mining arm De Beers, reported a 5.7% rise in diamond sales on Tuesday.
Shares for Sonatel - a BRVM-listed telecoms company - and Mauritius Commercial Bank closed off the Gainers List with increases of 2.6% and 1.5% respectively.
Losers
Nigerian equities tracked by the Index dominated the Losers List last week as the country "missed its best chance in 13 months to overtake Egypt in stock-market capitalization as an expansion of the new foreign-exchange window spurred a plunge in the naira" according to Bloomberg. Amongst the banking stocks, Zenith and Guaranty Trust Bank both fell by 13.9%; while Stanbic IBTC Bank was down by 11.6%. Shares for Nigerian Breweries ended the week in red with a 9.5% drop.

However, last week’s worst performing stock on the Index was Cairo-listed Abu Kir Fertilizers as the share price dropped by a hefty 37.6%.

Credits: David Ruwodo/Africa investor