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Africa investor Ai40 Weekly Commentary – 22 May 2017

By David | May 22, 2017

The Ai40 Investor’s Index continued on an upward trajectory, albeit at a more subdued rate last week. Friday’s close marked the fourth consecutive week of gains buoyed by banking equities, which have stood out to be the top performing stocks tracked by the Index over the last month. The Index gained 0.29 points, an increase of 0.31% from last week’s value of 93.22, to close Friday at a value of 93.51.

In the US, political risk factors made for a rollercoaster ride for financial markets. The S&P 500 rose to a new all-time record last Monday only for markets to be rattled on Wednesday and suffer this year’s worst drop. By Friday’s close, markets had surged back and recovered gains to be within 1% of the record set a few days earlier. According to Market Watch, “markets reacted to a report that Trump in February asked then-Federal Bureau of Investigation Director James Comey to stop an investigation into Russian interference into the U.S. presidential election, causing some investors to question whether Trump will finish his term.” The US dollar took a beating as it fell 0.8% against a basket of major currencies, while gold – considered a safe haven asset – notched its best performance in five weeks. According to Reuters, oil enjoyed another week of gains as “expectations increased that big crude exporters will extend output cuts to curb an inventory glut.” A barrel of Brent crude was trading at $53.71 on Friday.

At Friday’s close, the Dow Jones Industrial Average was up 0.69%, or 141.82 points, to close the week at a value of 20,804.84. The Nasdaq Composite Index gained 0.47%, or 28.57 points, to end the week at a value of 6,083.70, while the S&P 500 rose by 0.68%, or 16.01 points, to close Friday on a value of 2,381.73. According to Investopedia, global markets recorded mixed performances as “Japan’s Nikkei 225 was down 1.46%; Germany’s DAX 30 lost 1.03%%; and, Britain’s FTSE 100 was up 0.4%.”

Marking a fourth week of dominating the Gainers list, banking stocks tracked by the Index continue to be a favourite for investors; these equities took three of the five spots on last week’s top performers list. However, shares for Abu Qir Fertilizers – with a weekly gain of 7.6% – exhibited the biggest upward movements. Stocks for Kenya Commercial Bank were up 7.1%; the bank launched an e-payment system last week, titled Pay In Your Currency (PYC), which caters to international visitors. According to Telecom paper, “Customers can pay in their own local currency, while merchants continue to receive settlement and reporting in Kenyan shilling.” Still in Kenya, Equity Bank gained 6.8%.

JSE-listed mining giant Anglo American recorded a 5.4% gain despite an 11% fall in diamond sales for its diamond mining arm, De Beers Group. In Nigeria, shares for Guaranty Trust Bank were trading 5% higher at Friday’s close.

The Losers list last week was a North and West African affair. TMG Holding (a real estate firm) and Orange – both listed in Cairo – were down 10.3% and 5.9% respectively. Still in North Africa, Moroccan-listed Lafarge lost 4.8% over the week. Shares for Nigerian Breweries were trading 3.4% lower while Accra-listed Tullow Oil lost 2.4%.

Topics: Ai Press Office, All Sectors |