companies & markets

Africa investor Ai40 Weekly Commentary - 15 May 2017

Monday, 15 May 2017

The Ai40 Investor’s Index has been on a bull run as it notched a third week of gains on Friday. Nigerian equities tracked by the Index were star performers as the Gainers list was dominated by stocks from the West African nation. The Index rose by 1.12 points, a gain of 1.09% from last week’s value of 92.21, to close Friday at a value of 93.22.

On Friday, US stock markets - the Dow Jones and S&P 500 in particular - closed lower as investors reacted to lower-than-expected retail sales figures. Markets also digested the political uncertainty following President Trump’s sacking of FBI chief, James Comey. According to Market Watch, US equities recorded "their first weekly retreat in nearly a month".

At Friday’s close, the Dow Jones Industrial Average was down 0.11%, or 22.81 points, to close the week at a value of 20,896.61. The Nasdaq Composite Index closed marginally up by 0.09%, or 5.27 points, to end the week at a value of 6,121.23, while the S&P 500 fell 0.15%, or 3.54 points, to close Friday on a value of 2,390.90. According to Investopedia, global markets recorded mixed performances as "Japan’s Nikkei 225 rose 2.25%; Germany’s DAX 30 rose 0.42%; and, Britain’s FTSE 100 rose 1.8%".

Gainers
Continuing a three week trend, banking equities tracked by the Index proved to be winning picks as most of the Gainers list compromised of banking stocks, particularly from Nigeria. Guaranty Trust Bank was the week’s top stock with a gain of 12.3%. Zenith Bank and First Bank rose by 12% and 10.7% respectively, while Guinness Nigeria - a brewing company - gained 9.4%. According to The Eagle Online, Nigerian stocks rose to a more than six-month high last week "as dollar liquidity continued to improve on the currency market".

Another contributing factor to the performance of Nigerian banking shares tracked by the Index is that "Moody’s...maintained a stable outlook for Nigeria’s banking sector, with the ratings agency noting that acute foreign-currency shortages were set to ease" .

Losers
On the other end of the spectrum, banking equities featured quite heavily but this time from across the wider Africa region. Last week’s worst performing stock was Ecobank Transnational, which suffered a 5.7% drop in value. Banque de Tunisie fell 5.5%, while Nairobi-listed Equity Bank dropped 5.3%. The stock for Banque Centrale Populaire of Morocco lost 3.9% and - still in North Africa - shares for Poulina Group Holding edged down by 2.2%.

Credits: David Ruwodo/Africa investor