Global markets view
Share prices fell across the world on fears that China will raise interest rates to rein in inflation. The S&P finished the week 2.17% lower, the Sensex, Shanghai Composite and the Bovespa dropped by 4.04%, 4.60% and 3.08% respectively. Commodities were also affected: Crude Oil was down 1.13%, Gold 2.30% and High Grade Copper Futures dropped 1.41%.
In Emerging Africa the Ghana All Share Index, which is more closely correlated with global stock markets than the rest, fell 1.57%. The Nairobi 20 Share index was down 1.22%. The Nigerian All Share index surged 2.29% driven by a recovery in banking stock prices. Tea prices at the Mombasa auction increased by 3.9%; volumes rose by 6%.
Accra, Ghana
GSE Movers
Top gainers
SIC Insurance +11.11%, Ghana Oil +4.00%
Top losers
Ecobank Transnational -6.67%, CAL Bank -3.33%
SIC Insurance
SIC Insurance recently reported its results for the nine months to September 2010. Earnings per share climbed from 2.30 Pesewas to 2.67 Pesewas, a rise of 16%. The company reported a big jump in underwriting profit compared to the previous year, and a small drop in investment income. Shareholder’s funds climbed by 19%.At the current price the PE based on the nine months results is 11; a reasonably low figure.
Ecobank Transnational
Ecobank’s share price has been see-sawing between 14 and 15 Pesewas for the last nine weeks. Ecobank has offices in 31 African countries and has a broader presence across West, Central, East and Southern Africa than any other bank. Growth in revenues was flat in the first six months of the 2010 while profit was lower due to higher impairment provisions primarily in the Nigerian subsidiary. Profits in the nine months to September 2010 were up 35% on the prior year, which points to a very strong third quarter performance. The share is cheap at the current price (PE of 9).
Nairobi, Kenya
NSE Movers
Top gainers
City Trust +8.27%, Carbacid + 4.90%
Top losers
Eaagads -35.03%, Pan Africa -9.09%
Eaagads
Eaagads gave back the huge gains made last week after media reports of a dispute regarding land that was to be earmarked for a major real estate project. Eaagads' performance as a coffee company has been erratic; a conversion of the business to a real estate company as had been earlier envisaged would have been a real game changer.
Pan Africa
Pan Africa reported half year after tax profits for the period to June 2010 of Kshs 210 Million: the full year after profits for 2009 were Kshs 138 Million. Barring a major unexpected reversal, the full year results for 2010 should be very good given the performance of the bond and stock markets in the year to date. The current price of Kshs 70 translates into a low PE of just 7.95. While the stock is cheap, the little float on the counter translates into low liquidity which would make it difficult to quickly accumulate a significant holding.
