Tuesday, December 21, 2010

Market Intelligence - Equities

During the week of 13 – 17 December 2010, African stock markets showed mixed performance despite the bullish global stock markets in the U.S. and Europe. The US markets reached new two-year highs, largely on the back of the November rise in retail sales, solid gains in manufacturing data and a decline in weekly jobless claims. Also, recent policy decisions in the U.S.A., especially the extended tax cuts and unemployment benefits, contributed to the positive sentiment. On the other hand, worries about the European debt crisis continued to dampen investor confidence following the downgrade of Ireland’s credit rating and warnings on possible problems in Spain and Belgium. Movements for most markets reviewed in Africa were within the +0.8% range, with only Kenya’s NSE 20 Index experiencing a decline by 1.3%. Nigeria’s NGSE All Share Index remained unchanged over the week.

Equity Focus

Ghana: Despite the losses incurred during mid-week following the refusal by the High Court to grant an injunction that would have prevented the sale of Unilever Ghana’s shares in Benso Oil Palm Plantation Limited, Ghana’s All Share Index recovered by the end of the week to continue its previous weekly gains, rising by 0.7% following a 3.5% increase a week earlier. The rise in the index was largely driven by gains in the financial sector, which include Ghana Commercial Bank, Ecobank Transnational Incorporated and UT Bank Limited. The Ghana Oil Company and the milk processor Fan Milk Limited were also among the gainers.

Kenya: The NSE 20 Index extended the previous week’s marginal losses of 0.04% by another 1.3% fall during the week-ending 17 December 2010. The NSE movements reflect, among other factors, the political uncertainties generated by the naming of suspects to be charged for the 2008 post-election violence. Moreover, the recent rise in food and energy inflation may reduce disposable incomes, which in turn could negatively affect the performance of the telecoms giant and biggest listed company Safaricom, whose share prices have been falling in recent weeks.

Click here for the Market Intelligence Table