Wednesday, December 15, 2010

Market Intelligence - Equities

During the week of 6 – 10 December 2010, African stock markets showed mixed performance despite rallies in the major global stock markets due to a tax cut package negotiated by President Obama and congressional Republican leaders and submitted to the Senate, higher-than-expected consumer confidence, and speculation in Europe that profits will be strong despite the sovereign-debt crisis.

Four out of the ten monitored African stock markets recorded gains in line with the major global markets over the week. The largest gain of 3.5% was registered by the stock market in Ghana, followed by substantial increases of 3.3% and 2.7% in the markets in Morocco and Egypt, respectively. On the other hand, six African markets reported losses in value. The market in Nigeria recorded the largest fall of 1.5%, followed by the market in Côte d’Ivoire, which posted a loss of 1.3%. The markets in Tunisia, Uganda, Mauritius, and Kenya registered minor losses (less than 0.8%).

Equity Focus

Ghana: The Ghana All Share Index picked up by 3.5% over the week on optimism that Ghana's first crude oil exports will hit the market early January. According to the government’s budget speech the economy is now forecasted to double its growth rate to 12.3 % next year. The budget speech also envisioned a hike in fuel prices of between 0.02 and 0.08 Cedis per litre to fund the repayment of debt owed by state-owned Tema Oil Refinery to creditors including Ghana Commercial Bank (GCB). GCB shares rose by nearly 12 % on the news.

Nigeria: The NGSE All Share Index fell by 1.5% over the week, as a majority of the blue chip companies on the Nigerian Stock Exchange, including Cutix Plc and Vitafoam Plc, incurred losses. The negative sentiment was partly driven by the negative profit before taxation reported by UNIC Insurance.

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