Stockmarkets set new performance records in 2013, NSE best in Africa

The Nairobi Securities Exchange was the best bourse in Africa in 2013. Business Daily Graphic  Nation Media group

By PETERSON THIONG’O The EastAfrican

In Summary

• Most investors who put their money in the stock markets got handsome returns, especially at the Nairobi Securities Exchange (NSE), which closed the year as the best performing bourse in Africa and the fourth in the World, according to the MSCI index.
• Rwanda Securities Exchange (RSE) closed the year as the best performing bourse in the region.
• Analysts say the region’s bourses benefited from falling inflation which freed consumer spending, while the relative pick up of the global economy as well as the quantitative easing in the US also revived international capital flows.

Strong foreign investor participation in 2013 pushed regional bourses to their best year that saw the stock markets set new performance records.

Most investors who put their money in the stock markets got handsome returns, especially at the Nairobi Securities Exchange (NSE), which closed the year as the best performing bourse in Africa and the fourth in the World, according to the MSCI index.

Data analysed by The EastAfrican indicates that investors showed a strong appetite for companies in the financial, manufacturing and investment sectors, a preference shown by the strong performance on counters in these segments.

READ: Share prices in regional bourses rise on foreign investor interest

So what were the best and worst performing counters in the four bourses and should investors hold or sell these shares in 2014?

Old Mutual Securities in a research note released on Friday picked 10 companies at the NSE which they believe will offer good value to investors in 2014.

The researchers picked three financials (Equity, Co-operative and National Bank), one utility company (Kenya Power), a manufacturer (EABL) as 2014 top picks. They also identified Kenya Reinsurance, Safaricom, KenolKobil, TransCentury and Centum as the top bets this year.

“With relatively stable macro-economic factors, the country as a whole is poised for growth. However, a smooth transition which began last year though the dispensation of the new devolved government will determine the stock market’s and the economy’s performance,” said Old Mutual.

In Uganda for example, cigarette maker BAT, Stanbic and Umeme led the pack, gaining 76 per cent, 32 per cent and 50 per cent respectively last year. In Kenya, Centum, Britam and Pan Africa Insurance rose 167 per cent, 145 per cent and 115 per cent respectively, making them the most lucrative counters at the NSE.

At the Dar es Salaam Securities Exchange (DSE), Tanzania Breweries Ltd (TBL) gained 167 per cent, Dar Commercial Bank (DCB) rose 110 per cent, while Tanzania Tea Packers Ltd gained 67 per cent.

Africa Barrick Gold (ABG) closed the year as worst loser, shedding 68 per cent of its value at the DSE.

The Rwanda Securities Exchange (RSE) closed the year as the best performing bourse in the region with its All-Share Index rising by over 130 per cent, rising from 100 basis points at the start of the year to close at 234 basis points, driven by a strong price rally from Bralirwa and Bank of Kigali, which rose to Rwf845 ($1.25) and Rwf239 ($35 cents) year on year from $26 cents and $5 cents respectively.

READ: Rwanda Securities Exchange performs best in the region

The Tanzania Share Index almost doubled, jumping 95 per to 2,839.680 last week from 1,455.52 in January 2013. The All Shares Index for the same market jumped 23 per cent over the same period from 1491.56 to 1835.050. The DSE saw its turnover rise from the average of Tsh50 billion (31.2 million) to Tsh250 billion ($156.2 million) — higher than the combined bourse’s total turnover for the past five years.

The NSE 20-share index gained 18.89 per cent since January, while the bourse’s All share index rose 41.18 per cent in the period. Based on its All Share Index, the NSE was in October rated third best in Africa, after Malawi and Ghana.