1.5-africa economic and financial brief 14 february - 18 february 2011

7/27/2019 1.5-Africa Economic and Financial Brief 14 February - 18 February 2011

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The African Development Bank GroupChief Economist Complex

Contents:

1. Market Commentary

1.1 Stock Markets1.2 Commodity Markets1.3 Exchange Rates

2. Regional Developments

3. Countries in Focus

4. Summary

1. Market Commentary

1.1 Stock Markets

During the week of 14 February 18February 2011, global equity marketsadvanced on the back of positive economicindicators and the agreement reached at theG-20 meeting of finance ministers in Paris.The US Dow Jones index closed the weekwith 1.0% gains driven by improvingcorporate earnings and manufacturing dataand continuing efforts of G-20 countries totackle global imbalances. However, mostAfrican bourses closed weaker.

The reviewed African stock markets,except that of Uganda, remained innegative territory during the week. Thelargest loss was registered in Tunisia(2.2%), followed by Kenya (1.4%), SouthAfrica (1.3%) and Morocco (1.2%). Also,Ghana, Mauritius, and Nigeria postedminor losses of between 0.1 and 0.2%. Onthe other hand, Ugandas stock marketcontinued its rally from the previous weekrecording gains of 1.3%. Cte d'Ivoiresindex remained unchanged over the week.The market in Egypt continued to beclosed for the week.

Equity Focus

Uganda: The All Share Index climbed forthe second consecutive week, rising by1.3%, mostly on the back of the price andtrading volumes surge of Bank of Baroda.Since news of a 150% stock dividend wasreleased, Bank of Barodas stock price has

been drifting higher and has been the maindriver for buoying the stock market.

Tunisia: The stock market slipped by2.2% over the week reflecting negativeinvestors sentiment. The decrease in

equity prices was driven by bankingshares which are subject to concerns thatbanks may hold bad loans from the ex-presidential family.

Kenya: The Index extended its previous

weeks moderate losses of 1.4% byanother 1.3% drop over the week,undermined by the recent politicalconfrontation regarding the nominationprocess for top judicial posts.

1.2 Commodity Markets

Coffee: Alongside most other commodityprices, the price of coffee in theinternational market continued its rally.The price of Arabica coffee increased by7.5%, while that of Robusta coffee rose by3.5% over the week, mostly driven bylimited supplies due to bad weather andincreasing speculative buying. The year todate changes in coffee prices of Arabicaand Robusta up to the end of the weekamounted to 21.6% and 12.0%,respectively.Crude Oil (Brent): Crude oil pricesrebounded marginally by 0.7% amidunrest in Libya.

Market BriefVolume2, Issue 6

26 February, 2011

Africa Economic & Financial BriefFor the period 14 February18 February, 2011

Prepared by the following staff: Jiyoung Choi ([email protected] , Tel 216 7110 2464); Anouar

Chaouch ([email protected] , Tel +216 7110 3989); Peter Walkenhorst ([email protected] ,Tel

+216 7110 2193), Manager, Research Partnerships Division, supervised the work. The Brief draws uponinformation from Reuters and Bloomberg.

Mthuli [email protected]+216 7110 2062

Charles Leyeka [email protected]+216 7110 2175

Dsir [email protected]

+216 7110 2205
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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The cocoa industry

inCte dIvoire has

been slowing partl y

due to EU and US

sanctions on cocoa

shipping.

Gold & Silver: Precious metals endedhigher, boosted by US CPI data triggeringworries over inflation and investorsinclination towards seeking safe-havenassets. The price of gold rose by 1.4%,

while that of silver shot up 6.5% over theweek.

1.3 Exchange Rates

Following the previous week, the majorityof African currencies depreciated against theU.S. dollar alongside the Euro. The Eurorecorded 1.2% drop against the U.S. dollar,as investors turned their interests towardssafe-haven assets, notably the U.S. dollar, s

the unrest in the Middle East and NorthAfrica continued.

Twenty two African currencies underreview, including the CFA Franc,depreciated vis--vis the U.S. dollar. Thehighest deprecation of 2.5% was recordedby the Gambian Dalasi. Moderate lossesbetween 1.1% and 1.6% were posted by thecurrencies of Malawi, Mauritania, So Tom& Prncipe, Sudan and Uganda.

In contrast, eleven currencies appreciatedwith the largest gain of 2.0% being recordedby the Leone (Sierra Leone) followed by theNew Metical (Mozambique), whichregistered a 1.9% appreciation.

2. Regional Developments

Africa: According to South AfricasStandard Bank Group, compared to 2009,Chinas investment in Africa is projected toincrease by 70% to $50 billion by 2015.Meanwhile, Standard Bank also forecaststhat bilateral trade between China and Africawill amount to up to $300 billion by 2015,doubling the 2010 level.

East Africa: Representatives from the EastAfrican Community visited the LakeVictoria Basin Commission (LVBC) to beinformed about the operation of LVBC.LVBC has been in charge of coordinatingthe sustainable development agenda of theLake Victoria Basin, which is a driver foreconomic growth in east African countries.

Moreover, EAC and the Government ofFinland signed a grant agreement worth 2million Euros aiming at support of activitiesconcerning the Lake Vitoria Basin during the

period 2011-14.

3. Countries in Focus

Cte dIvoire: The cocoa industry in CtedIvoire has been slowing, partly due to EUand US sanctions on cocoa shipping. In thissituation, the cocoa regulator stated about 0.3million tonnes of cocoa were left in farmingareas. The regulator also said it would collecexport taxes from cocoa companies eventhough cocoa exports are under sanctions.

Egypt: The Central Bank expects economicgrowth for the fiscal year ending June 2011 tobe between 3 and 3.5%. Initially, thegovernment had projected the growth rate toamount to up to 6.2%. The central bank statedthat the greatest damages to the economywould be in tourism undermined by the unrestin Egypt, while the damages to Suez Canarevenues would not be higher.

According to the Central Agency for Public

Mobilization & Statistics (CAPMAS), thegovernment statistics agency, the politicaunrest in Egypt has led to income losses intourism, construction and manufacturingamounting to 10 billion Egyptian pounds.

Ethiopia: The annual inflation rate rose to17.7% y/y in January from 14.5% inDecember on the back of rising food pricesPrice caps on essential foods have been putinto place in order to curb trading behaviorthat inflates food prices. The government

stated that if the price caps fail to prevent theprice from rising, it would start directlysupplying items to the market at fixed prices.

The Central Bank

of Egypt expects

economic growth to

be lower than

earl ier projected

Africa Economic & Financial Brief: 14 February-18 February 2011 Page 2


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Appendix Table 1: Stock market movements Week ending on 18 February, 2011

Stock Markets

Region/Country Index Name Index Code

MarketCapitalization(USD, million)(18-02-2011)

Weekly % change( 18-02-2011)

Year-to-date %Change

Week underreview

Previousweek

Dec 31 -Feb 18

Cte d'Ivoire BRVM Composite Index BRVM CI 5,509 0.00 0.49 15.9

Egypt* CASE 30 Index CASE30 CLOSED

Ghana Ghana All Share GSE 12,855 -0.20 0.24 4.3

Kenya Nairobi SE Index- NSE 20 NSE 20 15,040 -1.38 -1.43 -3.7

Mauritius Mauritius All Shares SEMDEX 185,539 -0.13 1.74 4.7

Morocco Casa All Share Index MASI 128,845 -1.15 1.72 -0.2

Nigeria NGSE All Share Index NGSE 7,873,092 -0.17 -0.30 7.5

South Africa All Share Index JALSH 5,378,314 -1.34 0.16 1.2

Tunisia Tunis se Tnse Index STK TUNINDEX 3,660 -2.19 0.44 -12.0

Uganda* Uganda SE All Share index USE 5,204.7 1.30 2.49 3.4

Others

USA Dow Jones Industrial DJ Index 3,870,561 0.96 1.50 7.0

France CAC 40 Index CAC40 758,757 1.36 1.34 9.3

Japan Nikkei 225 Index N225 222,798,080 2.24 0.59 6.0

* Value at end of 17/2/2011



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Appendix Table 2: Exchange rate movements Week ending on 18 February, 2011

Exchange Rates (currency per US$)

Region/Country Currency NameCurrency

Code

Weekly % change ( 18-02-2011)Year-to-date %

Change

Week under review Previous week Dec 31 Feb 18

Africa

Algeria Algerian Dinar DZD -0.46 -0.16 1.2

Angola New Kwanza AON -0.03 0.03 -0.7

Botswana Pula BWP 0.20 -1.22 -5.0

Burundi Burundi Franc BIF -0.17 0.32 -0.6

Cape Verde Escudo CVE -0.23 -1.31 1.8

Comoros Comoros Franc KMF -0.80 0.67 2.4

Congo. Dem. Rep. of Congolese Franc CDF -0.56 0.51 -2.7

Djibouti Djibouti Franc DJF 0.08 -0.17 0.7

EgyptEgyptian Pound EGP

0.11 -0.46 -1.3Ethiopia Birr ETB 0.02 -0.19 -0.6

Gambia. The Gambian Dalasi GMD -2.49 3.80 3.6

Ghana New Cedi GHS 0.83 3.37 -1.9

Guinea Guinea Franc GNF 0.14 0.00 -6.9

Kenya Kenyan Shilling KES -0.28 -1.05 -2.0

Liberia Liberian Dollar LRD 0.69 0.00 -0.7

Libya Libyan Dinar LYD -0.25 -1.09 0.2

Madagascar Ariary MGA 0.85 0.32 6.2

Malawi Kwacha MWK -1.37 0.25 -1.7

MauritaniaOuguiya MRO

-1.58 -0.55 -1.3

Mauritius Mauritius Rupee MUR -0.20 -0.39 3.2

Morocco Dirham MAD -0.15 -0.47 2.1

Mozambique New Metical MZN 1.91 0.16 3.8

Nigeria Naira NGN -0.31 -0.11 -1.1

Rwanda Rwandan Franc RWF 0.00 -0.08 -1.8

So Tom & Prncipe Dobra STD -1.12 -0.36 2.3

Seychelles Seychelles Rupee SCR -0.04 -0.14 -0.6

Sierra Leone Leone SLL 1.96 1.81 1.0

Somalia Somali Shilling SOS 0.11 -0.60 -0.3

South Africa Rand ZAR 0.32 -0.73 -8.1

Sudan Sudanese Pound SDG -1.17 -2.83 -5.1

Tanzania Tanzanian Shilling TZS -0.12 -0.06 -1.5

Tunisia Tunisian Dinar TND -0.38 -0.48 1.4

Uganda Uganda Shilling UGX -1.30 -1.68 -2.4

Zambia Zambian Kwacha ZMK -0.03 0.69 2.2

CFA zone Countries* CFA Franc XOF -0.60 -1.03 2.2

Others

Europe Euro EUR -1.24 0.29 -5.3

Japan Yen JPY -2.24 1.13 10.4

Source: AfDB Statistics Department, February 2011* : in the interbank currency market


1.5-africa economic and financial brief 14 february - 18 february 2011

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