There was no reason to expect the turnaround seen on African markets or maybe there was. Most of the markets closed on negative territories this week with the highlight being Nigeria losing all the performance gained year-to-date. Top 3 performers half-year are now Malawi, followed by Ghana and Tunisia.


    The bear market is officially on in Nigeria. Treasury yields have dropped to around 12% from as high as 18% following government’s initiative to reduce borrowing costs and foreign investors have been fleeing as a result. Dangote Cement, which accounts for around a third of market capitalisation, lost 7.08%. The NGSE plunged by 6.38%.

    Kenya is looking to implement a 35% corporate tax for companies on annual income of more than KES 500mn. The draft still needs to be approved by parliament, but should it be approved, this would represent the highest corporate tax rate in the region. Treasury expects Kenya’s budget deficit to lower to 5.7% of GDP in the fiscal year starting in July from 7.2% this fiscal year. In addition, central bank governor Patrick Njoroge reported that the economy has expanded by 5.8% in the first quarter of this year supported by tea, horticulture exports and the service sector. On Monday, the bank kept its key lending rate at 9.5%, stating the impact of a preceding cut was yet to be fully felt. A necessary condition to additional monetary easing would be to achieve fiscal deficit targets. On another note, Kenya’s inflation rose to 3.95% year-on-year in May from 3.73% the previous month. This is right in the middle of the government’s target range. The NSE lost 1.62%.


    Malawi’s finance minister announced that the country’s domestic debt is likely to more than quadruple in the next financial year as the government attempts to offset falling public revenues. The 45 bn kwacha bailout of state-run Agricultural Development and Marketing Corporation, as well as low revenue collection and the failure to receive 55 bn kwacha in grants from donors have all impacted government income. External debt currently stands at 23% of GDP which is manageable. The MSE added 3.55%.


    MTN Ghana is about to become the most valuable company listed on the Ghana Stock Exchange. Indeed, in an IPO, the telecom operator expects to sell about 4.63 bn shares in MTN Ghana at 0.75 cedis per share. MTN is the leading mobile operator in Ghana. The GSE lost 3.14%.


    african indices

    BSE DCI9,087.92-0.03%12/04
    DSE ASI1,783.40-0.09%12/04
    EGX 3028,503.75+1.25%08/04
    JSE ASI75,311.75+0.01%12/04
    LuSE ASI12,770.30+0.03%12/04
    MSE ASI115,642.22-12/04
    NGX ASI102,314.56-0.71%12/04
    NSE ASI110.63+0.40%12/04
    NSX OI1,555.84-0.16%12/04
    RSE ASI144.71-0.14%12/04
    SEM ASI1,967.17+0.09%12/04
    USE ASI1,053.27-0.65%12/04
    ZSE ASI100.39+1.73%12/04