Thursday, July 15, 2010

Market Intelligence - Equities

African stock markets recorded mixed performance during the week despite rallies in the global markets. The market in South Africa recorded substantial gains of 3.6%, while stock markets of Mauritius and Tunisia posted moderate gains of 0.7% and 0.6%, respectively. In contrast, the markets of Nigeria and Uganda registered significant losses of 2.6% and 2.0%, respectively. The stock markets of Côte d'Ivoire, Egypt, Ghana, Kenya, and Morocco reported minor losses of between 0.1% and 0.4%.

Equity Focus

South Africa: The All Share Index rose by 3.6%, recovering from its losses in the previous week. The rally in the market was driven by increased risk appetite of investors based on improved prospects for a global economic recovery. At the same time, this increase may not be durable, since the downside risks to the slower global recovery have markedly risen, with the European debt crisis and lukewarm short-term US economic prospects.

Nigeria: The NSE All Share Index lost 2.6% during the week, reflecting worse-than-expected performance of the banking subsector. In particular, the Intercontinental Bank, one of the nine bailed out by the central bank last year, posted a 238 billion naira pre-tax loss for the 10 months to December 2009, compared to a 336 billion loss in the previous full year. Strengthening of the domestic financial sector remains a key pre-requisite to growth and asset market performance. Click here for the Market Intelligence Table.