Africa Market Update - April 2015

MARKET UPDATE – AFRICA | March 2015
Interbank Rate
Source: Central Bank of Kenya, StratLink Africa
EQUITY MARKET UPDATE
One: Companies Post Depressed
Performance in 2014
Media service provider, Nation, reported a
2.9% decline in net profits for the full year
ended 2014 to USD 26.8 Million with revenues
remaining near flat at USD 145.4 Million.
Similarly, top tier bank, Co-operative,
saw its net profit drop by 7.0% to USD 91.0
Million on the back of major restructuring in
2014. CIC Insurance also reported a decline
in net profit, by 16.6% in 2014, to USD 11.9
Million. The decline in profit was occasioned
by a 42.6% surge in total expenses to USD
143.2 Million.
Co-operative Bank vs Nation Media
Share Price (Kes)
+6.1 %
NSE 20 Share Index
change year-on-year
NSE 20 Share Index Trend
-3.5 %
NSE 20 Share Index
change month-onmonth
Source: Bloomberg, StratLink Africa
NSE 20 Share Index Month-on-Month
Source: Bloomberg, StratLink Africa
Source: Bloomberg, StratLink Africa
Such performance has played a major role
in subduing aggregate market performance
in March 2015. The performance points to
an adverse business climate confronted by
corporates in 2014. Notable strain on the
business climate in 2014 stemmed from
high terror risk that affected players in the
service sector.
Two: Capital Gains Tax Hangover
The market has also been decelerated by
uncertainty over the fate of the Capital
Gains Tax that is likely to have left many
investors adopting a wait and see stance.
In February 2015, brokers threatened to
suspend trading for a month over disagreement
with the Kenya Revenue Authority on
their role as collecting agents.
6 | StratLink Africa Ltd.
It has been a bearish season at the exchange
in what we assess can be attributed
to two main factors:
www.stratlinkglobal.com