This week was marked by a reversal of the positive trends seen so far in most African Markets with the strongest decline observed on the Tanzanian equity market.
President John Magufuli of Tanzania fired his mining minister and the chief of the state-run mineral audit agency on Wednesday after an enquiry into possible undeclared exports by mining companies to escape tax.
The President said that Acacia Mining declared 1.1 tonnes of gold in the containers but did not declare other precious metals in the consignments. The investigation established that the shipment contained up to 15 tonnes. Acacia denied any misconduct. Acacia’s stock price lost over 14% after the announcement. The DSE lost 7.47%.
As widely expected, the South African Reserve Bank kept its key rate unchanged at 7% on Thursday. This came as ratings downgrades could still affect the rand and harm an improving inflation outlook. Governor Kganyago stated that should inflation continue its downtrend; the target range could be achieved sustainably and a rate cut could be possible.
However, he cautioned that in the current uncertain environment, the risks to the outlook could easily crumble. Consumer inflation came below expectations in April and reached 5.3%.
The Reserve bank expects inflation to reach 5.7% for the year and sees inflation remaining within the target range through 2019. The JSE lost 0.79%.
According to its finance ministry, Kenya’s current account deficit expanded to 7.7% of GDP in February from 5.9% last year. The deficit expansion seems to arise from a fall in the value of exported goods and services combined with other unspecified income drops. The NSE gained 5.46%.
The NGSE gained 3.38%. According to the country’s National Bureau of Statistics, Nigeria’s recession extended in 1Q17. Its GDP contracted by -0.52% (year-on-year) in real terms, it is the fifth consecutive quarter of contraction since 1Q16. This quarter’s GDP figure is higher by 1.21% from rate recorded in the preceding quarter.
In its monetary policy meeting next week, the central bank is expected to keep benchmark interest rates at 14%. However, the overall outlook should improve in the second quarter as the state of pipeline repairs and a weak base of comparison suggest the oil sector should grow more strongly.
Average oil production increased to 1.83 mn barrels in the first quarter. The NBS said the economy’s non-oil sector grew by 0.72% in the first quarter.
Moreover, thanks to higher oil revenues, the central bank has managed to narrow the spread in the naira currency’s official and parallel market rates.
Under its International Development Assistance programme, the World Bank will lend Zambia $600 mn over the next three years. The LuSE increased by 0.01%.
The EGX30 rose by 1.10% supported by outperformance of Orascom Telecom which rose 5.41% and the heavy weight Commercial International Bank rose 3.01%.
Source: Africanmarkets.com
