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Africa investor Ai40 Weekly Commentary – 26 June 2017

By David | June 29, 2017

After going on a bull run and touching 2017’s highest point, last week the Ai40 Investor’s Index took a knock due to poor performances by the previous week’s top stocks. However, equities listed in Morocco and Kenya shined on the Index as they dominated the Gainers List. The Index was down by 1.67 points (or 1.72%) from last week’s value of 96.76, to close Friday at a value of 95.09.

In the US, equity markets closed higher on Friday following some downward pressure (on energy stocks in particular) earlier in the week. Tech equities continued a rally as the sector rebounded from previous lows. According to LA Times, “technology companies…are forecast to report strong growth in the upcoming earnings season.” In Europe, it was a less upbeat close to the trading week as the Stoxx Europe 600 finished with a 0.3% drop – the third consecutive losing week. Euro-equities were dragged down by a lower-than-expected PMI for June and losses in energy shares; with oil prices enduring a tough week. In Asia, Chinese markets closed up on Friday thanks to positive market sentiment “boosted by easing liquidity conditions” according to XinhuaNet.

At Friday’s close, the Dow Jones Industrial Average was largely flat as it fell by 0.01%, or 2.53 points, to close the week at a value of 21,394.76. The Nasdaq Composite Index gained 0.46%, or 28.56 points, to end the week at a value of 6,265.25, while the S&P 500 was also up by 0.16%, or 3.80 points, to close Friday on a value of 2,438.30. According to Investopedia, global markets recorded mixed performances as “Japan’s Nikkei 225 rose 0.97%; Germany’s DAX 30 fell 0.15%; and Britain’s FTSE 100 fell 0.43%.”

In the Gainers List, two countries stood out in the form of Morocco and Kenya as equities from these markets dominated gains. Banque Centrale Populaire listed in Casablanca was the best performing stock last week as it rose by 4.3%. The bank issued the first green bond in Morocco last week which drew a EUR 100 million investment from the International Finance Corporation (IFC). Still in Morocco, Shares for Maroc Telcom were up by 3.6%.

In Kenya, shares for Barclays Bank rose by 4.1% while stocks for East African Breweries were up by 3.4%. JSE-listed Anglo Platinum closed the week with a gain of 3.3%. This is despite an updated Mining Charter in South Africa which has been met with much resistance from the country’s Chamber of Mines. According to Business Day Live, the Charter “calls on mining groups to increase black ownership rates from 26% to 30% within 12 months.”

On the other end of the spectrum, Nigerian stocks tracked by the Index had the worst performance last week. All five slots on the Losers List were taken up by equities from the West African nation. First Bank came in at the bottom of the heap with a drop of 24.4%, while Zenith Bank fell by 21.4%. Shares for Guaranty Trust Bank were down 14.6%. Nigerian Breweries and Dangote Cement were in negative territory by 18.1% and 15.6% respectively.

The poor performance of Lagos-listed equities was due to a mix of factors ranging from heavy profit taking by traders as well as the debt renegotiation collapse between a consortium of lenders and Etisalat Nigeria.

Topics: Ai Press Office, All Sectors |