Africa investor Weekly Commentary – 1 July 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 | July 1, 2013

A slight loss took the Ai40 Investor’s Index to a fourth straight week of decrease; the Index last saw a gain on 3 June. This week’s loss was minimal however: the Index closed the week on 108.85, down 0.05% from last week’s 108.91.

The US Federal Reserve was in damage control mode after the announcement by Ben Bernanke that the Fed might wind down quantitative easing programmes by September. The hint sent stock, bond and gold markets spinning last week, resulting in the three major indices ending June down roughly 1%. This made it the first losing month of the year.

Friday’s close didn’t see too much movement. The Dow Jones Industrial Average closed down slightly to 14,909.60, losing 114.89 points, or 0.76%. The Nasdaq gained a minimal 1.39 points, or 0.04%, to reach a value of 3,403.25, while the S&P 500 lost 0.43%, or 6.92 points, to close at a value of 1,606.28.

South Africa was the big winner this week, with four of the top five highest gainers coming from down south. MTN Group topped the list with a gain of 10.3% to reach a price of US $18.36. MTN Group and another South African telecommunications giant, Vodacom, are each reportedly in advanced talks to acquire Neotel after Dimension Data dropped out of the negotiations.

Standard Bank gained 5.9% to reach a value of $11.13, while Sasol jumped 5.1% to reach $43.07. Anglo Platinum finally saw some good news in the form of a 3.8% gain. Egypt’s Orascom Construction saw a sturdy 7.1% increase: Egypt’s stock market saw a 1.43% gain on Sunday as opposition protests begin across the country. Investors took advantage of the low prices.

North Africa took another beating this week. As Egypt heads into another day of anti-government protests, the entire region suffered. Once again, Morocco’s construction giant Lafarge and real estate firm CGI made it onto the losers’ list. Lafarge lost 6.1% while CGI lost a massive 20.7%.

Egypt’s Commercial International Bank lost 7.2% while Banque de Tunisie topped this week’s list with a giant fall of 27.9%. According to economic data, Egypt’s financial woes have deepened since President Mohammed Mursi came to office a year ago. Tunisia meanwhile has been showing signs of recovery but will not be helped by the latest rounds of protest in Egypt.

Anglo American rounded out the list with a loss of 7.4%. According to BDlive, the London-based company is seeking to sell a 30% stake in the Minas-Rio iron-ore project in Brazil, which has suffered cost overruns and licensing delays.

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

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