Monday, November 22, 2010

Market Intelligence - Equities

During the week of 8 – 12 November 2010, African stock markets showed mixed performance while a bearish sentiment prevailed on stock markets in the U.S. and Europe on intensifying concerns about Europe’s debt crisis and growing speculation that China would raise interest rates. The stock market in Tunisia led the gainers, recording a substantial increase of 3.0%. It was followed by the markets in Nigeria and Mauritius, which registered significant gains of 2.3% and 1.4%, respectively. Increases of less than 1% were posted by the markets in South Africa, Uganda, and Morocco. On the other hand, four African stock markets fell, with Ghana, Côte d’Ivoire, and Kenya recording significant losses of between 1.2% and 1.6%, while that of Egypt registered a marginal loss of less than 0.1%.

Equity Focus

Tunisia: The Tunis Stock Exchange’s TUNINDEX soared by 3.0% in the second week of November, recovering significantly from its October setbacks. The rally came after the Government provided details on the short-term capital gains tax to be effective from January 1, 2011. Resources mobilized from the tax would be used to ensure adequate funding to the companies restructuring and upgrading their operations and, thus, would benefit the corporate sector.

Nigeria: The NSE All-Share Index rebounded by 2.3% over the week, driven by the banking sector which was going to benefit from the operations of the Asset Management Corporation of Nigeria (AMCON). The AMCON has announced that the toxic assets of rescued banks will be taken over by the corporation and converted to equity. In particular, the state-owned AMCON will buy N 2.2 trillion (USD 14.5 billion) of bad debts from banks at discounted prices.

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