Kenya, Egypt top Africa stock market ranking

Money Markets

A trader at the Nairobi Securities Exchange. Improved earnings reported by listed companies this month have sustained demand for securities. FILE 

By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com

In Summary

• The NSE All Share index grew by seven per cent in the past year, second only to the Egypt stock exchange’s EGX 100 index which gained 22 per cent.
• The 20 share index currently stands at 4958 points, representing a 0.7 per cent increase from its year opening level of 4926 points, though it did rise above 5000 points at the end of January.
• Improved earnings reported by listed companies this month have sustained demand for securities, especially on the small and medium size counters.

A strong resurgence this month has placed the Kenya stock market second among its African peers in the past one year in terms of growth.

A report by investment banker Africa Alliance shows that the NSE All Share index grew by seven per cent in the past year, second only to the Egypt stock exchange’s EGX 100 index which gained 22 per cent.

 

The gains are reflected in the increase of investor wealth at the bourse by Sh112 billion since the beginning of the year, with market capitalisation standing at Sh2.01 trillion on Thursday.

Improved earnings reported by listed companies this month have sustained demand for securities, especially on the small and medium size counters.

“The smaller counters are normally not very liquid in supply, and as such increased demand on their shares tends to push prices really higher than it would on the bigger more liquid counters,” said ABC Capital corporate finance and advisory manager Johnson Nderi.

The gains by the Kenyan All share index, which stood at 144.5 points Thursday from 136 in January, place it ahead of the bourses of Nigeria, Morocco, Tunisia and Zimbabwe.

The four exchanges along with Kenya’s and Egypt’s are considered to be second tier peers of African stock markets, with South Africa the only first tier market on the continent.

According to the Africa Alliance data, Tunisia’s TUNIS index was up 5.5 per cent over the period, while Morocco’s All Share Index (Casablanca MORALSI) is up 5.4 per cent.

Nigeria’s All Share Index has shed 10 per cent this year, with Zimbabwe’s industrial (All Share) index down nine per cent.

Emerging and frontier markets have been under pressure due to the US Federal Reserve Quantitative Easing taper. A slowdown in the Chinese economy has reduced demand for commodities, hitting currencies dependent on raw material exports.

READ: IMF sees risk in advanced economies cutting back stimulus too quickly

Measured through the All Share Index, the NSE ended 2013 as the third best performing bourse in Africa out of 18 bourses. NASI gained 43 per cent last year.

The 20 share index currently stands at 4958 points, representing a 0.7 per cent increase from its year opening level of 4926 points, though it did rise above 5000 points at the end of January.

This year, the highest gain in price has been recorded by East Africa Portland Cement, which is 52 per cent up at Sh97 a share, with Pan African Insurance and CIC Insurance both recording gains of 29 per cent at Sh115 and Sh7.70 respectively.

Other counters which have recorded gains of over 25 per cent this year include Eagaads, Kakuzi, Sameer, Kenya Re, Eveready and Unga Limited.Among the banks, CFC Stanbic and Diamond Trust Bank have made the biggest gains at 20 per cent each.