Africa investor (Ai) Weekly Commentary – 24 June 2013


I like this.


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 24, 2013

A fortnight is a long time for the companies on the Ai40 Index. Two weeks ago, the Index stood at a value of 113.92, which was down 0.91% from the previous week’s value of 114.97. This week, it stood at 108.91, losing a rather substantial 5.01 points, or 4.39%.

This comes after a miserable period that saw US markets go into free-fall on the not-unexpected hint provided by the Chairman of the Federal Reserve, Ben Bernanke, that the Fed will bring its stimulus programme to a close by the end of the year. The three major US stock market indexes each ended the week lower between 1.8% and 2.1%.

Friday’s close saw the Dow Jones Industrial Average gain 41.08 points, or 0.28%, to reach a value of 14,799.40; the tech-heavy Nasdaq was down 0.22%, or 7.39 points, to reach 3,357.25, and the S&P 500 gained 4.24 points, or 0.27%, to gain an overall value 1,592.43.

Vodafone Egypt was clearly the winner this week as it resumed trading and consequently jumped to a close of EGP60.00 from EGP28.01 last week, up 113.8%. In fact, North Africa took all five top spots on the Index this week in what investors will surely hope is a turnaround for the region still affected by ongoing political and economic turmoil.

Morocco’s CGI and Lafarge finally found themselves among the gainers after weeks on the other side, taking up second and third position respectively. Real estate firm CGI gained a hefty 15.7% while global construction company Lafarge saw a 6.7% rise.

Two banks took up fourth and fifth place: Banque de Tunisie and Morocco’s Banque Centrale Populaire each gained 3.0% apiece.

Nigeria was strongly on the losing side this week as Zenith Bank, Guaranty Trust Bank and Nigerian Breweries lost 12.9%, 12.9% and 14.5% respectively. Standard & Poor’s recently expressed reservations about Nigeria’s banking sector: “We believe rapid loan growth and increased competition will raise the inherent credit risk and conceal the growth of problematic assets, thereby raising credit risks for 2014 and 2015,” it said.

AngloGold Ashanti continued its downward trend, losing an unfortunate 16.5%, while this week’s biggest loser was Egypt’s Mobinil, which was down a massive 21.5%. Apart from labour unrest in South Africa’s mining sector, gold miners have clearly lost favour with global investors this year. Gold miners were also among the hardest hit by Bernanke’s announcement as gold has been a large beneficiary of quantitative easing.

For more on the Ai40 Index, please visit the Africa investor website at

Tags: , , , , , , , , , , , , , , , , , , ,

Post a Comment

Your email is never published nor shared. Required fields are marked *


Subscribe without commenting