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Africa investor Ai40 Weekly Commentary – 8 May 2017

By David | May 9, 2017

The Ai40 Investor’s Index rose for the second week in a row thanks to impressive performances by banking stocks tracked by the Index. However, stocks for the ‘three Anglos’ were at the bottom of the heap with a collective drop in value of 28.3% over the period under review. The index was up by 0.29 points, a gain of 0.31% from last week’s value of 91.92, to close Friday at a value of 92.21.

On Friday, global markets were dragged down by sliding commodity prices as oil hit its lowest point since last November when the OPEC agreed to cut output. In the US however, stronger-than-expected jobs data for April buoyed equity markets and saw the Nasdaq and the S&P 500 closing at record highs.
At Friday’s close, the Dow Jones Industrial Average was up 0.3%, or 55.47 points, to close the week at a value of 21,006.94. The Nasdaq Composite Index closed up by 0.4%, or 25.42 points, to end the week at a value of 6,100.76, while the S&P 500 gained 0.4%, or 9.77 points, to close Friday on a value of 2,399.29.

Banking stocks outperformed on the Index in the past two weeks. Lagos-listed Stanbic IBTC Bank was the top performer over the period with a hefty gain of 19.8%. According to This Day Live, “Stanbic IBTC Group achieved significant growth in profit after tax by over 100%”. Still in Nigeria, stocks for Zenith Bank were up 11.7%. In North Africa, Banque Centrale Populaire of Morocco also recorded impressive gains of 12% while Douja Prom Addoha, a real estate firm gained 10%. Abu Qir Fertilizers, an Egyptian chemicals company picked up 8.4%. According to Research Pool, following the Egyptian Pound “floatation, which took place back in November, significant changes took place affecting the industry significantly making fertilizers an attractive sector with huge room for growth”.

The Losers list featured all three of the South African Anglo mining giants. Shares for AngloGold Ashanti suffered an 11% drop value as investors sold off the stock following an announcement that the firm has “ceased activities at the La Colosa gold project in Colombia, one of the largest open-pit mines in the world”. The decision was made following a referendum by Colombian voters to ban mining in the municipality of Cajamarca where the mine is located.

Anglo Platinum stocks endured losses of 10.3%. The price of platinum fell as low as $893 per ounce last week and posed a risk for investors who owned long positions on the stock. Equities for Anglo American, suffered less of a drop at 7%

Brvm-listed Sonatel, (a telecommunications company) was down 7.7%, while the worst performer on the index; Telecom Egypt fell by a significant 13.8%.

Topics: Ai Press Office, All Sectors |