Global and local market conditions
The performance of global stock markets was mixed. The Sensex(India) declined by 0.95%, the Bovespa (Brazil) rose by 0.83%. The S&P 500, the Nikkei (Japan), and the FTSE 100 (UK) climbed by 1.65%,1.96% and 1.16% respectively. The SSE composite (Shanghai) leaped by 3% after Moody’s Investors Service said it might raise the country’s debt rating. China’s economy has performed strongly throughout the financial crisis.
In the emerging Africa, Nairobi’s NSE-20 Share index and Ghana’s All Share fell by -0.34% and -3.71% respectively. Nigeria’s stock market outperformed; rising by 3.13%. While the Nigerian market as a whole seems to be on an upward trend, the movements of individual stocks have been extremely volatile over the past three weeks.
Commodities advanced robustly. Crude oil was up 1.44%, Gold 2.08% and copper 2.25%. A US Department of Agriculture report indicating that the final harvest for soybeans and wheat will be lower than expected added fuel to the agricultural commodities rally in the year to date. Wheat futures leaped by 9.81% during the week.
Accra, Ghana
GSE Movers
Top gainers
Golden Star Resources +19.95%, AngloGold Ashanti +4.44%, UT Bank Limited +4.00%
Top losers
Aluworks -24.14%, Ecobank Ghana -10.18%, Ecobank Transnational -6.67%
Golden Star Resources
Golden Star resources Ltd continues to rally strongly for a fourth consecutive week. While international gold prices continue to climb at a fast clip, the price jump on this stock is far higher that would be justified by the rise in gold prices. The rise in this counter appears to be a convergence (probably driven by arbitrage trading) between the value of the shares listed on the Ghana stock exchange and shares listed on the American and Toronto stock exchanges. The Ghana listed shares have been trading at a steep discount to the AMEX and TSE shares prices. The Ghana listed shares still relatively cheap; they are now at a discount of roughly 30% to their North American counterparts.
Nairobi, Kenya
NSE Movers
Top gainers
Scangroup +18.25%, Safaricom +8.99%, Diamond Trust Bank 8.26%, KCB +7.74%
Top losers
Kenya Airways -6.88%, StanChart-5.84%, Standard Group -5.76%, Bamburi -5.19%
Scangroup
The huge jump in the past week was followed by an even heftier leap this week. The share price dipped slightly on Friday probably indicating that the rally on this counter is finally running out of steam. The current price and the rally to date are difficult to justify with publicly available information. Unless the deal with Ogilvy turns out to be hugely transformational, there should be a correction at some point.
Diamond Trust Bank
Diamond Trust reported excellent half year results, both interest income and non-interest income rose strongly in the first half of the year. Non-interest income was boosted in the second quarter by huge gains on fixed income investment disposals. This week’s rally could have been driven by investors seeking bargains after the gains in the big bank stocks over the last few weeks (DTB is a medium sized bank).
