Global and local market conditions
The key frontier African stock markets bucked the global trend. The Ghana All Share index leaped 3.5%; the Nairobi Stock Exchange 20 share index jumped 2.26% while the Nigerian All Share index scrapped a .36% gain. The Nigerian market was weighed down by the recent sacking of the Director General of the Nigerian Stock Exchange and the suspension of business mogul, Aliko Dangote, from its Board.
Price movements of select commodities
Tea +2.75%, White Sugar 4.64%, Coffee (Arabica) 3.45%, Crude Oil -6.30%, Gold +1.07%, Cocoa -2.28%, Palm Oil -1.08%
The price of Arabica Coffee hit a 12 year high this week due to high demand and mediocre production from key producers such as
NSE Movers
Top gainers
Pan
Top losers
Pan Africa
Pan Africa reported an eleven fold increase in half year profits. The profit after tax for the half year ended June 2010 was Kshs 210 Million compared to Kshs 17 Million in the first six months of 2009. The bulk of this profit was from investment gains. The core insurance business under-performed the prior year due to increased business acquisition costs. With the rally in both bonds and equities at the NSE from June 2010 to date, the company should be in a position to report even higher investment gains at the end of the year. While the share price of this company is expected to climb, the counter is illiquid: the float is very small with minimal shares trading on a weekly basis.
NIC Bank
NIC Bank reported a 55% increase in half year profits to Kshs 818 Million. The annualized earnings per share on the June 2010 results are Kshs 4.46 which translates to a PE ratio of 10.31. While this is a reasonable valuation, the company is more expensive than its close peer Diamond Trust Bank which is trading at a PE of only 7.8.
Safaricom
Safaricom’s share has been hit by Zain’s announcement of a cut in calling charges to Kshs 3 per minute to all networks. Safaricom currently charges Kshs 8 per minute. Zain is now owned by Bharti Ariel which has a successful high volume/low charge operation in
GSE Movers
Top gainers
Top losers
African Champion Industries -11.11%, Ghana Commercial Bank -2.94%, SIC Insurance Company Limited -2.5%
The rally on this share has been sustained and volumes traded have been much higher compared to the previous week. Even after the 40% leap in the share price over two weeks, the company is still cheap: trading at a PE of just 10 based on June 30, 2010 results
HFC Bank Limited
The company’s’ share price seems to have merely bounced back this week after last week’s price drop. At the current price, the company is trading at a P/E of only 9.
Quote of the Week:
We have the blessing of the wealth of our vast resources, the power of our talents and the potentialities of our people. Let us grasp now the opportunities before us and meet the challenge to our survival. "Kwame Nkurumah”
