Overall, sentiments on African equity markets were mixed with 9 of the markets we cover advancing, 2 remaining flat, and 6 losing grounds in local terms this week.
Egypt leads the board this week. The Northern African exchange’s benchmark index, EGX 30, jumped 4.58% in a busy week that saw EGP 1.63bn (USD 104m) worth of shares exchange hands on average every day. Total market capitalization stands at EGP 677.8bn (USD 43bn). Orascom Construction PLC has announced that it has signed a Memorandum of Understanding (MoU) with the National Authority for Tunnels (NAT) to design, install and commission Egypt’s first high-speed rail system. The agreement, which Orascom signed together with Siemens Mobility and the Arab Contractors, encompasses a rail system network spanning 1,000km. The first high-speed line will stretch across 460km, and has an order value of around $3bn. The company stocks are up 15.6% so far this year.
Zimbabwe is the second best performing market this week. The ZSE ASI recovered a bit from the significant drop the week before and advanced 4.07%. Total market turnover amounted to ZWL 477.9m or ZWL 81.8m (USD 1.17m) a day. Total market capitalization stands at ZWL 311bn (USD 3.8bn). In the news, national statistical agency, Zimstats, published data suggesting that Zimbabwe’s exports have continued to defy global Covid-19 trade restrictive measures with the country registering a 20.3% increase in export earnings in November 2020, from US$439.00 mn in October. The jump in foreign receipts was largely attributed to tobacco exports, which peaked towards year end. Tobacco is Zimbabwe’s second largest foreign currency earner after gold. The strong exports meant the country’s trade balance remained positive despite growth in imports.
Nigeria completes the top 3 as the Lagos exchange’s ASI gains 2.63%. Total market turnover was NGN 32.7bn or NGN 6.5bn (USD 17m) a day on average. The financial services industry contributed 41% to the total turnover, followed by the construction/real estate industry (13%).Total market capitalization stands at NGN 21.5tn (USD 54bn). Nigeria’s inflation rate increased by 15.75% (year-on-year) in December 2020, the highest rate recorded in 3 years. According to the latest Consumer Price Index report, released by the National Bureau of Statistics (NBS), the latest figure is 0.86% points higher than the rate of 14.89% recorded in November 2020. Food inflation index explains a significant portion of the increase. The closely watched index rose sharply by 19.56% in December compared to 18.3% recorded in the previous month.
On the opposite, the markets in Tanzania, Ivory Coast, and Namibia booked the worst performances, losing 0.79%, 3.06%, and 4.02%, respectively. The West African Regional Exchange even trails all markets across the continent so far this year. The BRVM Composite index is down 9.04% year-to-date in local currency and -10.05% in USD.
At the individual stocks level, the Nigerian resource company Japaul stands out. Shares in the company soared 56.7% this week making it the best performer on the continent. Investors are optimistic about the ongoing restructuring of the former oil servicing into a gold mining company following a partnership a Chinese mining company announced last November. The stock is up 145.16% so far this year.
