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BusinessDay

Ai Weekly Commentary – 6 May 2013

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There was further good news this week as the Ai40 Index jumped from a value of 113.21 to that of 116.32; a leap of some 2.74%. The Index benefitted from Nigerian stocks, which rose to their highest levels in more than three weeks, and a 10% gain by Dangote Cement to an unprecedented high.

The latest US jobs report on Friday pushed markets there to giddy heights as investors cheered the news that the nation had added more jobs than expected. Friday’s close saw the Dow Jones Industrial Average up by 142.38 points, or 0.96%, to reach a value of 14,973.96. The Nasdaq gained 38.01 points to reach a value of 3,378.63 (up by 1.14%), and the S&P 500 gained 16.83 points, or 1.05%, to reach a close of 1,614.42.

The Dow rose 1.8%; the S&P gained 2% and the Nasdaq added 3% for the week. April was a strong month, with the S&P 500 advancing for the sixth consecutive month, news that will no doubt cheer weary investors.

Gainers

Nigeria did well this week: three out of the top five companies hailed from that region. Dangote Cement tops the list with a massive gain of 16.1%. The company announced a huge increase in the first quarter of 2013: gross profits were up 64.7% to N66.0 billion. The company has also announced plans to expand into 13 other African countries.

The Nigerian stock index rose 3.18% to 34,504 points; its highest level since April 9. Stanbic IBTC Bank and Guinness Nigeria gained 11.2% and 7.9% to reach prices of US $0.09 and $1.74 respectively. The other gainers this week were Banque du Tunisie, with a gain of 8.7%, and East African Breweries with an increase of 7.8%.

Losers

It was truly a mixed bunch in the loser’s list this week, but telecommunications firms seemed to fare less well. Morocco’s Maroc Telecom and Senegal’s Sonatel lost 1.6% and 1.9% respectively. Currently, leading state telecoms companies from Abu Dhabi and Qatar are going head-to-head for a stake in Maroc Telecom, so we will no doubt see more activity there in coming months.

Other losers this week included AngloGold Ashanti, which continues to suffer from a poor performance, losing a relatively small 1.3%. Kenya’s Equity Bank and Ghana’s Tullow Oil rounded off the list, losing 3.1% and 6.3% respectively.

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