Wednesday, September 1, 2010

Market Intelligence - Equities

During the week of 23 – 27 August 2010, African stock markets showed a mixed performance despite sluggish global stock markets. Those in Egypt, Ghana, and Tunisia continued a bullish trend reflecting improving investor confidence within the countries. The stock markets in Côte d'Ivoire and Morocco recorded significant gains of about 2.6% and 2.3%, respectively, while those in Tunisia, Egypt, Uganda and Ghana recorded moderate gains of between 1.1% and 1.7%. The market in Mauritius remained virtually unchanged. In contrast, other local stock markets fell together with the weak major global stock markets due to persisting concerns over a double-dip recession in the global economy. This was the case for stock markets in Nigeria, Kenya and South Africa, which posted losses of 3.3%, 1.9% and 0.9%, respectively.

Equity Focus

Ghana: The renewed optimism of domestic investors continued during the week, with the market stretching gains for a third straight week. The GSE All Share Index rose by 1.7% over the week, representing a gain of 21.4% this year. The recent rallies have been mainly led by gains of financial stocks which appeal to investors with high profit potential.

Côte d'Ivoire: The BRVM Composite Index rose by 2.6% over the week, driven by strong earnings of natural rubber producer SAPH. The company announced a 14-fold increase in profits in the first half of the year compared to the same period last year due to high rubber prices and production levels.

Nigeria: The NSE All Share Index fell by 3.3% during the week, led by losses of bank stocks. Investors sold bank shares on concerns over bank profits, ahead of the September 1 deadline by which banks must meet the Central Bank’s rules on lending for buying stocks. As a prudential measure, the Central Bank capped lending by banks to investors who want to use the funds to buy stocks to 10% of all loans.
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