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Africa investor Ai40 Weekly Commentary – 5 June 2017

By David | June 5, 2017

Last week, the Ai40 Investor’s Index cooled off and dipped for the first time in five weeks, after reaching the year’s high the previous week. A mixed bag of equities from Nigeria and Egypt led gains in the period under review, while a handful of South African stocks tracked by the Index recorded poor performances. The Index dropped marginally by 0.18 points, a decrease of 0.19% from last week’s value of 95.34, to close Friday at a value of 95.16.

In US markets, President Donald Trump sparked global backlash from his peers last week after revealing that the US would withdraw from the Paris Climate Accord. However, stock markets (for instance, ETFs that track energy stocks) were little moved by the withdrawal as investor sentiment is that the deal still has substantial support from a global perspective. It was a little more upbeat on Wall Street last week as according to CNBC, “U.S. equities rose to record levels on Friday as Wall Street shrugged off a jobs report that came in well below expectations.” The world’s largest economy added 138,000 jobs last month, missing analyst predictions of 185,000. In Europe, markets ended the trading week higher as the pan-European Stoxx 600 closed up 0.23%.

At Friday’s close, the Dow Jones Industrial Average gained 0.29%, or 62.11 points, to close the week at a value of 21,206.29. The Nasdaq Composite Index rose by 0.94%, or 58.97 points, to end the week at a value of 6,305.80, while the S&P 500 rose by 0.037%, or 9.01 points, to close Friday on a value of 2,439.07. According to Investopedia, global markets recorded mixed performances as “Japan’s Nikkei 225 rose 2.53%; Germany’s DAX 30 rose 1.75%; and, Britain’s FTSE 100 fell 0.09%.

Gainers
Nigerian stocks tracked by the Index enjoyed a strong performance last week, as three of the five spots on the Gainers list were taken up by companies from the West African nation. Leading the pack was First Bank, with a massive gain of 32.5% last week. Building materials company, Dangote Cement featured at second position as the stock rose 16.8%. Nigerian Breweries was up 11.4%. Nigerian stocks enjoyed positive investor sentiment last week as markets feel that “Africa’s biggest economy will emerge from recession soon” according to Reuters. Additionally, stocks benefitted from investors taking advantage of the attractively low valuation of equities coupled with improved dollar supplies in the forex market according to Nasdaq.

Meanwhile in Egypt, chemicals company Abu Qir Fertilizers gained 9.5% while Commercial International Bank was up 6%.

Losers
The three Anglo mining firms again found their way into the Losers list. In fact, South African stocks took up four of the five positions on the list. AngloGold Ashanti fared the worst on the Index last week with a drop of 4.8%, Anglo Platinum stock fell by 4.3%, while Anglo American suffered a little less with a drop of 3.8%. Standard Bank of South Africa was down 4.5% last week. South African equities moved lower at the end of last week as ratings agency Fitch affirmed its sub-investment grade rating for the country. Additionally, resource stocks “took a heavy knock as the slide in commodity prices continued” according to Xinhua Net.

Finally, shares for telecommunications company Orange Egypt fell by 4.3%.

Topics: Ai Press Office, All Sectors |