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Africa investor Ai40 Weekly Commentary – 14 November 2016

By Staff Reporter | November 14, 2016

The commentary this week will be slightly different as we take a step back to view the Ai40 index over a longer time period of three weeks, in order to get a high-level view of the index’s movements.

Over this period, the Ai40 Index dropped in value and this downward trend was particularly influenced by a historic event on the continent; the devaluation of the Egyptian pound. The Egyptian central bank “abandoned the pound’s peg of 8.8 to the dollar in an effort to attract inflows of capital and close down a booming black market in dollars” according to Reuters. The Index lost 1.62 points, or 1.74%, to close at a value of 91.22, down from 92.84.

In US markets, the surprise electoral victory by Republican candidate Donald Trump, saw stocks close the session generally higher. This was fuelled by investor sentiment that the President-elect would spend more on infrastructure and soften regulation for the financial and pharmaceuticals sectors. Conversely, bond investors “lost more than $1 trillion on global bonds as they braced for changes…which could result in higher interest rates and more inflation” according to USA Today.

At Friday’s close, the Dow Jones Industrial Average gained 0.21%, or 39.78 points, to close the week at a value of 18,847.66. The Nasdaq Composite Index closed up by 0.54%, or 28.32 points, to end the week at a value of 5,237.11, while the S&P 500 lost 0.14%, or 3.03 points, to close Friday on a value of 2,164.45.

Gainers
A combination of investors rushing to safe havens following Trump’s victory and a $10 improvement in coal prices pushed Anglo American to the top of the gainers list with an increase of 12.4% for the mining company. Going against the losing trend for Nigerian equities, brewer Guinness Nigeria Plc was up by 11.6% this session followed by BVRM-listed telecoms firm Sonatel Sn which gained a decent 11.2%.

The stock for Kenya Commercial Bank, Eastern Africa’s largest bank by asset base, edged up by 9.0% following news that the bank was set to enter the Southern African market. Telecoms giant MTN group enjoyed an increase of 8.1%.

Losers
The losers list for this session was an all Egyptian affair with massive losses following the floatation of that country’s currency in order to attract fresh capital and mitigate hard currency shortages. Vodafone Egypt stocks suffered the worst with a drop of 50%. Orascom Construction share prices fell by 47.2% and Abu Qir Fertilizers, a chemicals company, lost 46%.

Two telecoms stocks, Mobinil and Telecom Egypt were at the better end of the losers list with losses of 44.2% and 35.9% respectively.

For more on the Ai40 Index, please, visit the Africa investor website at www.africainvestor.com.

Topics: Ai Press Office, All Sectors |