Sub-Saharan Africa Stock Markets 2010 Review & 2011 ... - Imara

Market Outlook for 2011 Top Picks for 2011
The desire to make the market more investor friendly has
continued into 2011, with the GSE opening the year by
extending trading hours by an additional two, from 1000
GMT – 1300 GMT per session to 1000 GMT – 1500 GMT. It
also introduced, with effect from 4 January, two new
indices, the GSE-CI (Composite Index) and the GSE-FSI
(Financial Stocks Index).
The exchange is also expecting at least four new listings
this year, the most high profile of these likely to be that
of oil group Tullow Holdings. The listing had initially been
slated for late 2010 but was subsequently postponed with
the company saying it wanted to focus on first oil from
the Jubilee field and year end corporate planning.
Another certainty to list is Comet Properties Ltd., whose
IPO was slated to close on 31 January, but has since been
extended to 15th February 2011, the company citing “the
unhelpful effect of the intervening holidays, the need to
accommodate the interest of key institutional investors
who require extra time to complete the approval processes
for their investments as well as the need to afford
opportunity to monthly earners and workers to participate
in the offer.” Soccer club Accra Hearts has also reportedly
received the all-clear to list on the exchange, where it
will be Africa’s first listed sporting club. On the negative
side, automobile dealer CFAO is set to formally de-list
from the GSE in March, while Accra Breweries Limited as
also expressed its intention to de-list this year, possibly
by the second quarter.
Ayrton Drugs – Purchase of stake by Adcock Ingram
should begin to yield real benefits going forward; likely to
be used as a hub by Adcock for West Africa expansion;
ETI – Solid Q3 10 results; pan-African expansion drive still
ongoing; strong technology platform; alliance with
Nedbank may receive more attention
Fan Milk – Rallied hard in 2010 and thus unlikely to repeat
its performance, but good long term fundamentals driven
by oil revenues for a company that benefits directly from
any increase in GDP per capita and disposable incomes
Ghana Commercial Bank – Like Fan Milk had a stellar
2010 in terms of share price performance; largest branch
network in Ghana and room for improvements in
efficiencies; Tema Oil Refinery loans actively being paid
back by the state
As can be seen, it is likely to be a busy year in terms of
corporate activity on the GSE, and that allied with the
very bullish anticipated GDP growth rate for 2011 spurred
by the oil find, should see the exchange putting in a
strong performance. Also expected to boost liquidity and
activity on the exchange will be pension fund reforms, as
well as a change (if it materialises as the exchange hopes)
in the trading strategy of the state pension company
SSNIT, which holds large chunks of many of Ghana‘s listed
stocks, and has traditionally done so on a long only basis.
We thus expect the market to provide real returns once
again this year, spurred on by continued oil euphoria,
strong macroeconomic fundamentals, new listings, and
the continued focus on consumer oriented and financial
sector stocks, which are set to record another positive
earnings year.
10