Investors update: November 28 2022

Bellwether, banking stocks lift NGX to positive close

Highlights

• The Nigerian equities market closed Friday on a positive note with the All Share Index rising by 6.88% week-on-week, driven by buying interest in bellwether stocks.
• The combined market capitalization of the largest stocks on the exchange appreciated by 8.68% to close at N18.77 trillion ($43 billion) from N17.27 trillion the previous week. 
• These stocks include Airtel Africa, BUA Cement, Dangote Cement, BUA Foods, and MTN Nigeria Plc. Meanwhile, investors in the largest banks on the exchange gained N56.36 billion.

Source: Nairametrics

Our Takeaway

The impressive rally recorded by the Nigerian exchange—despite rising interest rates aimed at curbing inflationary pressure—came on the back of impressive financial results reported by Nigeria’s large-cap companies and rising interest by investors in these stocks, most of which are currently undervalued, according to data from Chapel Hill Denham. On a year-to-date (YTD) basis, the Nigerian bourse has returned 11.33%, outperforming its Johannesburg (-0.76%) and Nairobi (-23.54) peers.

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Oil prices erase 2022 gains amid China’s Covid protests

Highlights

• Oil prices fell to near their lowest levels this year on Monday as street protests against strict Covid-19 curbs in China stoked concern about the outlook for fuel demand.
• Brent crude dropped $2.66, or 3.1%, to trade at $80.97 a barrel after diving more than 3% to $80.61 earlier in the session – its lowest since January 4.
• Similarly, US West Texas Intermediate (WTI) crude slid $2.39, or 3.1%, to $73.89 a barrel. It fell as far as $73.60 earlier, its lowest since Dec. 22, 2021. Both benchmarks, which hit 10-month lows last week, have posted three consecutive weekly declines.

Source: Reuters

Our Takeaway

China, the world’s biggest crude importer, has stuck with President Xi Jinping’s zero-COVID policy even as much of the world has lifted most restrictions. Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over the restrictions flared for the third day and spread to several cities in the wake of a deadly fire in the country’s far west. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, will meet on December 4.

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US-based VC firm 500 Global opens an office in Egypt

Highlights

• US-based venture capital firm 500 Global is set to open an office in Egypt. It has already partnered with Information Technology Industry Development Agency (ITIDA) to launch a range of investment and startup-focused support programs.
• 500 Global has appointed Amal Enan, based in Cairo, as a partner to oversee deal-related activities in the country.
• The VC firm has been investing in Egypt for a decade and has backed more than 60 Egyptian startups, including MaxAB, Homzmart, and Breadfast.

Source: Wamda

Our Takeaway

Egypt has the fourth largest startup ecosystem in Africa, after South Africa, Nigeria, and Kenya. Its startups have attracted nearly $500 million in venture capital funding in 2021– more than twice the amount in 2020. The 500 Global-ITIDA partnership seeks to provide promising Egyptian-based startups with the tools they need to succeed and to train aspiring accelerator managers, thus creating the conditions to foster a regional community of innovators.