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Africa investor Weekly Commentary – 19-04-2013

Ghana grants banks extension for reports filing

The good news of last week was of a temporary nature for the Ai40 Index; it dipped a little, losing 0.53 points, or 0.47%, to settle at a value of 111.65.

Throughout the week, US markets reacted to weak data on factory activity. Wednesday’s sharp decline was followed by a slight uptick on Thursday, but this was short-lived. The S&P 500, for one, moved below its 50-day moving average for the first time this year, weakening its recent period of strength.

The Dow Jones industrial average ended down 81.45 points, or 0.56%, at 14,537.14. The Standard & Poor’s 500 Index took a turn for the worse 10.40 points, or 0.67%, to reach 1,541.61. The Nasdaq Composite Index was down 38.31 points, or 1.20%, at 3,166.36.

Gainers

In a relatively quiet week for gainers, North Africa’s banking sector continued its good run, with Morocco’s Banque Marocaine du Commerce and Egypt’s Commercial International Bank taking the top two slots, recording gains of 2.4% and 1.9% respectively. Egypt’s Central bank this week sold US 600 million in foreign exchange to banks to cover strategic imports, while The World Bank granted Morocco $369.44m to fund economic projects. Confidence in the region is gradually being restored, it would seem.

It was a strong week for telecommunications companies as three top firms rounded off the list of gainers, with Morocco’s Maroc Telecom, Kenya’s Safaricom, and Senegal’s Sonatel all recording slight increases: they gained 1.9%, 1.8% and 1.4% respectively.

Read also: Africa investors looking beyond negative headlines -World Bank

Losers

Last week, Nigeria’s banks came under fire; this week, South African companies are the poor performers. AngloGold Ashanti was the week’s poorest performer, losing a whopping 15.4%. Analysts are divided over the stock however; AngloGold Ashanti was downgraded to ‘hold’ by Société Générale, while Deutsche Bank had more confidence, upping the stock from ‘hold’ to ‘buy’.

Sasol, Anglo Platinum and Standard Bank 6.6%, 7.5% and 7.6% apiece. On Wednesday, South African stocks booked their biggest one-day drop in two months, falling 1.9%. Nervous investors continue to sell stocks in mining companies on worries over commodities prices.

Rounding off the week’s losers, Nigeria’s Zenith Bank lost 10.8%, despite recording $634m after tax, and its recent listing on the London Stock Exchange.

For more on the Ai40 Index, please visit the Africa investor website at www.africainvestor.com.