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Africa investor Ai40 Weekly Commentary – 3 April 2017

By David | April 3, 2017

The Ai40 Investor’s Index experienced downward pressure for the second week in a row despite a continued upward trend in Kenyan banking stocks on the Index. The Index fell by 1.69 points, a drop of 1.79% from last week’s value of 94.06, to close Friday at a value of 92.37.

Global equity markets were lower on Friday as investors “locked in a quarterly gain that has given equities their best start to a year since 2012” according to Nasdaq. The MSCI world equity index fell by 0.4% on Friday following a 6.4% increase in the quarter. In the US, losses in Telecoms, Financials and Consumer Goods dragged equity indexes to close lower on Friday. US stocks rallied in Q1 thanks to expectations that President Trump’s administration would action pro-growth policies. However, investors (and the new administration) have recently faced sobering realities in just how tough it will be to successfully push the policy reform agenda. In oil markets, WTI, the U.S. benchmark for the price of oil, was trading at $50.28 per barrel.

At Friday’s close, the Dow Jones Industrial Average was down 0.31%, or -65.27 points, to close at a value of 20,663.22. The Nasdaq Composite Index closed marginally lower by 0.04% or 2.61 points to end the session at 5,911.74. The S&P 500 lost -0.23%, or 5.34 points, to close Friday on a value of 2,362.72. In Europe, Germany’s DAX 30 gained 2.06% and Britain’s FTSE 100 gained a marginal 0.07%. Japan’s Nikkei 225 fell 1.78%.

For the second consecutive week, Kenyan banking equities were the top performers on the Index. Kenya Commercial Bank and Equity Bank took first and second place with gains of 10.2% and 9% respectively. Last week, Equity Bank signed a €75 million credit line with the European Investment Bank (EIB). According to The Star, “the funds will be largely channelled to enterprises in import and export businesses, including manufacturers, to promote regional and international trade.” JSE-listed oil & gas firm Sasol, sat at third place as shares for the company gained 5.6%. The company recently announced a semi-annual dividend which was set to be paid on March 30 2017. Additionally, the stock was upgraded by HSBC Holdings plc from a “hold” rating to a “buy” rating.

Brvm-listed Ecobank Transnational and Anglo Platinum gained 4.8% and 4.7% respectively.

The Losers list from last week was a mixed picture, however, the overarching characteristic was banking stocks from various regions. Standard Bank South Africa came in at the bottom of the heap with a hefty drop of 12.7% over the week. In Kenya, stock for Barclays Bank was in negative territory by 11.8%. This is despite a positive development in the form of launching the first exchange traded fund (ETF) in East Africa by the bank. According to FT, “The product is a cross-listing of the $1.4bn NewGold ETF that listed on the Johannesburg Stock Exchange in 2004 and is also listed in five other African markets.”

Over in Nigeria, Guaranty Trust bank stock was down by 6.2%. JSE-listed MTN Group also found its place on the Losers list with a drop of 5.3%. The Group reported its first-ever annual loss for the 2016 financial year however, Phuthuma Nhleko (Executive Chairman) cashed in a R72.2 million pay cheque for the same period. In Morocco, Douja Prom Addoha – a real estate firm – was down by 4.9%.

Topics: Ai Press Office, All Sectors |