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

Market Review for 2010
Spurred by a solid performance across the board, the ALSI
gained 62.19% to end the year at 1,188.07 points.
However, a materially weakening currency versus the
dollar, particularly towards the end of the year and which
has continued into 2011 as the election approaches meant
the USD return was a relatively lower 33.81%. The
currency weakness has been attributed to high dollar
demand from the energy sector, tight supply, speculative
trading by offshore players and elevated state
expenditure.
Of the twelve counters that were listed at the beginning
of the year, nine closed in the black while three ended in
the red. BATU was the top performer, up 431.69% in USD
terms, as it saw a re-rating after it more than doubled its
2009 earnings.
Market capitalisation increased by 78.98%% over the
course of the year to close at USD 5.6bn. EABL was the
most capitalised counter with 35.81% of the total. SBU
was the most highly capitalised local listing, with 10.74%.
Total volumes for the year were up 82.39% to 224.8m
shares while value traded increased by 75.38% to USD
18.4m, both metrics boosted by the listing of NIC in
March. SBU remained the most active stock by volumes
and value, with 39.83% and 52.02% contributions
respectively. The liquidity ratio remained very low, with
some of the cross listings still only seeing all of their
trades occurring in Nairobi. Nevertheless a slight
improvement was recorded to 0.33% from the 0.28%
achieved in 2009.
Market Outlook for 2011
The market will be watching the presidential election
with interest, given that the challenger has already
threatened an “Egypt style” response should the
opposition feel the election was rigged. Political risk will
thus be somewhat higher until the electoral process is
complete. With cross listings dominating the market,
however, events in Kenya are more likely to have an
impact on the direction of the exchange, we believe.
10 Most Active Stocks by Volume
Company
Vol. (m) % of Total
Stanbic Bank Uganda 89.52 39.83
NIC 86.74 38.59
Uganda Clays 31.50 14.02
Bank of Baroda 8.70 3.87
DFCU Ltd 6.02 2.68
East African Breweries 1.12 0.50
New Vision 0.57 0.25
British American Tobacco 0.49 0.22
Equity Bank 0.10 0.05
NMG 0.00 0.00
10 Most Active Stocks by Value
Company
Val. (USD) % of Total
Stanbic Bank Uganda 9 575 684 52.02
NIC 2 393 556 13.00
East African Breweries 2 035 835 11.06
DFCU Ltd 1 816 388 9.87
Bank of Baroda 1 457 957 7.92
Uganda Clays 737 162 4.00
British American Tobacco 191 386 1.04
New Vision 177 370 0.96
Equity Bank 18 929 0.10
NMG 3 563 0.02
Source: USE/Renaissance Uganda/IAS
Top Picks for 2011
DFCU – Growing branch network and deposits; strong
interim performance should filter through to FY;
introducing new products to boost fee income
Economic growth for 2010 is estimated at 6.3% and
forecast to grow to 6.5% in 2011 and then 8.6% in 2012 as
oil revenues begin to flow. The positive growth prospects
should thus also give the market upward momentum,
though the weak currency and potential impact on
inflation remains a concern in the short to medium term.
Liquidity remains a problem and to this end the USE will
this year move to trading every day of the week from the
current three, while at least three new listings are
expected this year, including Tullow Oil and Umeme.
Centum from Kenya has already cross listed earlier this
year. The USE is also working on developing a local index
to capture the trading activity of domestic companies.
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