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Africa investor Ai40 Weekly Commentary – 12 June 2017

By David | June 12, 2017

South African mining and a mix of banking equities tracked by the Ai40 Investor’s Index led the gains last week. Notably, JSE-listed miners notched an impressive performance after falling into the Biggest Losers category in the last review. Despite this, the Index continued to slip as it fell by another 0.19 points from last week’s value of 95.16, to close Friday at a value of 94.97.

In the US, stock markets were mixed at the end of last week as the Dow closed Friday at a record high while the Nasdaq posted its worst weekly performance of 2017. The Nasdaq – which is a tech-heavy index – was pulled down by almost 2% due to an abrupt drop in tech stocks. In the absence of fundamental or technical reasons for the sell-off, Market Watch attributed capital outflows to “simple profit-taking [and] a rotation to other names.” In Europe, drama unfolded in the UK election last week as Prime Minister Theresa May’s ruling party lost a majority and in the aftermath; the pound fell to a two-month low in erratic trade. In oil markets, news of increasing US inventories renewed investor scepticism about the OPEC’s ability to rebalance markets via output cuts. A barrel of Brent was trading at $48.15 while “US West Texas Intermediate was up 0.5 per cent in late trade at $45.88” according to Financial Times.

At Friday’s close, the Dow Jones Industrial Average rose by 0.42%, or 89.44 points, to close the week at a new high of 21,271.97. The Nasdaq Composite Index fell by 1.8%, or 113.85 points, to end the week at a value of 6,207.92, while the S&P 500 was down marginally by 0.08%, or 2.02 points, to close Friday on a value of 2,431.77. According to Investopedia, global markets recorded mixed performances as “Japan’s Nikkei 225 fell 0.83%; Germany’s DAX 30 fell 0.06%; and, Britain’s FTSE 100 fell 0.32%.”

JSE-listed mining firms and various banks tracked by the Index dominated the Gainers List last week. Coming from the very bottom of the heap to the top spot, AngloGold Ashanti was up by 9.8% last week. Stock for Anglo American fared similarly well with a 6.8% gain. Gold bullion prices neared the $1300 mark last week and naturally, gold miners on the Index saw an increase in share value. As a safe haven asset, gold enjoyed gains due to “rising political worries and some weak U.S. economic data” according to Barron’s.

Financial stocks also performed fairly well last week, as shares for First Bank were up 7.5% while Banque Centrale Populaire of Morocco gained 6.8% and stock for Barclays Bank Kenya rose by 6.6%

Brvm-listed Ecobank Transnational was the worst-performing stock on the Index last week with a decrease in value of 5.5%. This was followed closely by Lafarge as the building materials stock was down 5.4%. Still in North Africa, shares for Cairo-listed Abu Qir Fertilizers fell by 4.4%.

Stocks for Nigerian Breweries and Sasol were down 3.9% and 3.2% respectively.

Topics: Ai Press Office, All Sectors |