Global markets view
A majority of the main global stock exchange indices edged up in the four weeks to December 17, 2010. The S&P 500 was up 3.68%, Japan’s Nikkei up 2.81%, UKs FTSE 100 up 2.42%, India’s Sensex up 1.43%. Brazil’s Bovespa bucked the trend, dropping by 4.11%. A bigger than expected decline in unemployment has prompted traders to bet that Brazil’s central bank will raise interest rates; a rise in rates will negatively impact the real estate and retail sectors of Brazil’s economy..
Share performance in Emerging Africa was mixed in the past four weeks. The Ghana All Share Index rose by an impressive 4.06%, while the Nigerian All Share and Nairobi’s 20 Share indexes dropped by 1.61% and 5.55% respectively. The Nairobi listed shares have been dragged down by the uncertain political environment precipitated by the chief ICC prosecutor’s naming of prominent individuals as key suspects in the 2007/2008 election violence.
Global commodity price marched onwards across the board. Over the last one month Crude Oil, Gold and Copper prices in the futures markets rose by 9.79%, 1.96% and 8.35% respectively. Arabica Coffee and Cocoa futures prices rose by 7.34% and 5.42% respectively. Tea prices at the Mombasa auction increased rose by 1.36% and the volumes sold by 5.46% compared to the week ended November 19, 2010.
Most regional currencies held steady against the US dollar with the exception of the Tanzanian shilling which has risen by over 4%. The rise in the strength of the Tanzanian shilling has been attributed to increased Non Governmental Organization funding and substantial tourism receipts.
Accra, Ghana
GSE Movers
Top gainers
Ghana Commercial Bank +13.95%, SIC Insurance + 7.50%
Top losers
CFAO (Ghana) -33.33%, Aluworks -29.41%
Ghana Commercial Bank
Ghana Commercial Bank’s share price is up 231% in the year to date. Even after this huge rally the company is still fairly valued with a PE of 14 based on the nine month period to September 30, 2010. Ghana’s economy is expected to grow by between 11 and 20% in the coming year as the oil starts flowing from its offshore oilfields. The country as a whole and the banking sector in particular should benefit immensely from this windfall.
Nairobi, Kenya
NSE Movers
Top gainers
Sameer Africa +14.84%, Safaricom +4.44%
Top losers
Access Kenya -17.63%, East African Portland Cement -14.29%
Access Kenya
Access Kenya’s share price dropped after the company’s management reported that they expect 2010 profit to fall by at least 25 percent from last year because of depreciation and foreign-exchange losses. The company is facing strong competition from Safaricom and other well heeled mobile phone companies that have recently made a foray into data services. In year ended December 31, 2009 Access Kenya’s revenues grew by about 33% to Kshs 2 Billion, but profit after tax was down about 25% to Kshs 147.9 Million compared to 2008. If the 2010 profit drops as reported, it will be a second consecutive year of a double digit decline in profitability.
