Africa investor Weekly Commentary – June-03-2013

05-Jun-2013

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Brian has held positions with a variety of financial services companies, including Cantor Fitzgerald and FTI Consulting. An avid traveler and investor, Brian enjoys scouring emerging and frontier markets for hidden gems (Oxstones). Brian holds an M.B.A. with a concentration in finance from Georgetown University and a B.A. in economics and political science from Rutgers University. He also completed graduate studies in international management at the University of Oxford, Trinity College.







By Staff Reporter | June 3, 2013

Heading slightly upwards last week after several weeks of straight losses, the Ai40 Index added a slight but positive 0.79%, up from the previous week’s value of 114.06. In African capital markets news, South Africa’s JSE was trading up 0.66% last week Tuesday despite data released showing slower economic growth.

US markets experienced a pronounced surge last week on the back of some improved economic data that some say has put the financial crisis firmly in the “rear view mirror.” In what’s being referred to as ‘Super Tuesday,’ the Dow Jones Industrial Average soared to a record high of 15,409.39, after gaining more than 100 points, or 0.7%. At the same time, the S&P 500 rose 0.7%, and the Nasdaq added 0.9%.

However, the party was over by Friday’s close, which saw the Dow drop 1.36%, or 208.96 points, to reach a value of 15,115.57. The Nasdaq lost 35.39 points, or 1.01%, to reach 3,455.91. The S&P 500 lost 23.67 points, or 1.43%, to attain 1,630.74.

Gainers
In a rare good week for Anglo Platinum, the South African mining giant saw a gain of 7.4% to reach a price of US $5.67. On Friday, the South Africa rand saw a decline to below ZAR10 to the US dollar; its weakest level in more than four years. This news sent mining shares higher, including that of Anglo Platinum and AngloGold Ashanti, which gained a healthy 11.1% to reach a price of $18.40. Moroccan real estate firm Douja Prom Addoha increased its price by 8.4%.

This week’s biggest gainers both hailed from West Africa, with pan-African banking giant Ecobank and Senegalese telecommunications firm Sonatel recording double digit gains. Sonatel jumped 11.6% to reach $37.54. Last year, the company added more than 3.7 million mobile subscribers in 2012, while earnings grew 11%. However, Ecobank was the real winner this week, increasing its price by a robust 14.2% to land at $0.13.

Losers
It was not a good week for banks, as four out of the five biggest losers for the week belonged to that sector. Nigeria’s Guaranty Trust Bank and Zenith Bank lost 1.5% and 2.0% apiece, while Barclays Bank Kenya dropped 1.4%. South Africa’s Standard Bank lost 2.4%.

East African Breweries Limited fared the worst this week. Despite huge recent demand from foreign investors for shares in the stock, the company lost 5.5% to reach a price of $4.40. “Foreign investor buying remained healthy on the brewer but bids were placed at lower prices,” said Standard Investment Bank analysts.

For more on the Ai40 Index, please visit the Africa investor website at www.africainvestor.com.

 

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