The Exchange - East Africa's Source for Financial News The Exchange MAY 2017 - FINAL (1) | Page 4

4 .
GENERAL NEWS
MAY 2017
By Virginia Njoki - The Exchange

The East Africa 15 ( EA15 ) highlights on 15 of the most traded and highly capitalized stocks in the region on a monthly basis ( 15th of every month ). The primary purpose of the EA15 is to give investors a description and perspective of the regional stock markets ’ performance .

Highlights According to the latest World Economic Outlook report , global economy is garnering momentum and is forecasted to grow in 2017 at a faster rate of 3.5 % compared to 3.1 % in 2016 . The optimism is attributed to notable increase in global trade which is predicted to expand by 3.8 % supported by gradual recovery of commodity prices , business uptick in emerging markets and developing economies , and confidence in United States economy projected to increase 2.3 %. Sub-Saharan Africa growth of 2.6 % is projected to be curtailed by a slowdown of the region ’ s three biggest economies-South Africa , Nigeria and Angola . South Africa is faced by low investor confidence owing to negative global credit rating , Nigeria and Angola having been hit by low oil exports resulting in tight forex liquidity and partly by drought effects . East African economies remain among the most resilient and are projected to remain solid above 5 % supported by infrastructural investments and domestic demand . The countries however are mandated to keep increasing debt to sustainable levels in order to create a conducive macroeconomic environment .
Kenya : Nairobi Stock Exchange ( NSE ) Economic Survey report by Kenya ’ s Statistical Bureau estimates the country ’ s GDP to have expanded by 5.8 % in 2016 compared to 5.7 % in 2015 . Some of the sectors that posted significant improvement include : accommodation as tourism rebounded , information and communication ( 9.7 %), real estate ( 8.8 %) and transport ( 8.4 %). Traditional economy driver sectors recorded slowed down growth among them agriculture ( 4.0 %) owing to the impact of inadequate rainfall , construction ( 9.2 %) and financial and insurance activities ( 6.9 %) due to the capping of lending rate that slowed credit uptake growth . On the outlook , the economy will be under duress from the persistent drought that has raised inflation rate , slow private sector credit growth and rising oil prices . All in all , the ongoing infrastructural investment , domestic remittances and sustained trade are expected to sustain economic growth . Short term interest rates have seen a marginal rise for the 3-months and 1-year Treasury bill at 9.8 % and 10.9 % respectively .
Country
Sources : NSE , DSE , USE , RSE

East African ( EA15 )

Turnover ( US $)
The NSE All Share Index improved in the month under review to gain 1.6 % while the NSE 20 was up 1.94 %. Safaricom gained 2.7 % while EABL rebounded by 8.1 % after the ex-dividend price adjustment .
Tanzania : Dar es Salaam Stock Exchange ( DSE ) The country ’ s economy is expected to remain strong in 2017 sustained by local demand , exports of main commodities and infrastructural development . The World Bank notes that macroeconomic stability , effective public investment and introduction of structural reforms and policies to promote private sector investment and growth are major requirements to maintain economic growth . The Central Bank move to lower benchmark interest rate from 16 % to 12 % is expected to boost private sector investment and credit growth . Additionally , increase of exports value largely due to cashew nuts and tourism and a decline in imports has been contributing to narrowing of trade deficit by 50 %. The Vodacom IPO ( Initial Public Offer ) extended following requests by investors and possible under subscription ; this will see the offer run for two and half months . The IPO is expected to raise US $ 213M from local investors with foreign investors invited to buy in the secondary market . Short term interest rates have recorded marginal declines , an indication the lowering of benchmark rate could be yielding . The 91-day T-Bill was unchanged at 7 %, while the 182-day and 364-day were down to 12.8 % and 13.6 % respectively . Valuation indices improved partly supported appreciation of DSE shares up an impressive 21.2 % with the DSE Index gaining 1.5 %. CRDB Bank and TBL retained the most active counters cap accounting for 89 % of total volume ; the price was , however , unchanged .
Uganda Stock Exchange ( USE ) Uganda economic growth is estimated to expand by 5.4 % driven by infrastructural development ; however , impact of rainfall shortage to the agricultural sector , fiscal debt and financial sector stability may undermine the projected growth . The Uganda Central Bank revised the Central Bank Rate ( CBR ) downwards by 50 basis points to 11 % as it continues to support credit growth . Uganda has the highest lending rates upwards of 22 % regionally . The revision was guided by easing of inflationary pressure as headline and core inflation declined and stability of the local currency against major currencies in the past three months . Food price index , nonetheless , has been rising driven by the ongoing drought .
% of TT 4 / 28 / 2017 * Price
3 / 28 / 2017 * Price
Short term interest rates were also on a decline to yield 10.5 %, 12 % and 13.8 % for the 91-day , 182-day and 364-day treasury bills . Long term bonds yield about 16.3 %. The All Share Index gained 6.9 % while the Local Index lost close to half a percentage . Umeme and SBU were the most traded counters with the former losing ground by 2 % while the latter was unchanged .
Rwanda Stock Exchange ( RSE ) Bralirwa Ltd , the Rwandan brewer and soft drink manufacturer recorded a 5.6 % growth in full year revenues supported by an increase in soft drinks pricing and beer volume growth . The price increase was necessitated by a depreciating currency that pushed costs higher resulting in a 1.9 % drop in gross profit . Operating expenses were , however , down by 7 % on the back of stringent cost management measures . Financing cost rose by 33 % as the company concluded the investment program in both the brewery and soft drink plants . Higher interest and currency depreciation weighed the cost further down resulting in a 67.7 % drop in pre-tax earnings while net profits fell by 80.3 %. The company ’ s assets based at 93.3Bn up 3.7 %, shareholder ’ s wealth stood at 31.6Bn a 10.6 % drop . The company recorded an EPS of 1.36 and a book value of 30.8 . The RSE Index shed 1.75 % largely owing to depreciation of Bank of Kigali on capital gains as dividend books closure nears , and Bralirwa on lower than expected full year performance . I & M Rwanda became the fourth local company to be listed at the RSE after a successful and oversubscribed IPO . The share was the most active in the bourse having gained 22 % since its debut .
MoM %
1 Yr % ∆
ROE %
P / E
PBV
Div
Yield %
Kenya
SAFCOM
46,183,557
38.69
18.95
18.45
2.71
( 0.26 )
48.93
17.23
9.15
4.01
KCB
23,708,223
19.86
31.25
31.50
( 0.79 )
7.76
20.20
4.86
0.99
9.60
EQUITY
11,959,835
10.02
33.25
30.25
9.92
10.83
20.30
7.56
1.53
6.02
EABL
7,608,230
6.37
239
221
8.14
( 0.42 )
28.21
22.61
15.82
3.14
BAT
3,270,814
2.74
780
880
( 11.36 )
( 14.19 )
48.10
18.42
8.87
6.35
KenGen
853,933
0.72
6.50
6.55
( 0.76 )
13.04
3.20
7.14
0.23
-
Tanzania TBL
8,120,243
95.08
12,000
12,000
-
-
35.08
15.88
5.38
2.92
CRDB
136,947
1.60
185
185
-
( 26.00 )
11.18
6.13
0.67
9.19
NMB
80,184
0.94
2,750
2,750
-
-
21.53
8.92
1.79
3.78
DSE
78,872
0.92
1,260
1,040
21.15
14.55
70.48
11.03
7.77
-
Rwanda
IMR
44,068,007
98.71
110
90
22.22
22.22
21.10
9.47
1.81
3.64
BoK
516,859
1.16
244
250
( 2.40 )
7.02
1.88
8.79
1.88
4.53
Uganda
UMEME
1,949,755
93.76
480
490
( 2.04 )
( 23.81 )
18.20
7.82
1.32
7.37
SBU
36,292
1.75
26.00
26.00
-
( 18.75 )
30.35
6.96
1.86
0.03
DFCU
87,779
4.22
759
760
( 0.13 )
( 22.55 )
19.50
8.34
1.51
2.86
TT-Total Turnover , 1 Yr % ∆-1Year change , 1M-Month to date , ROE-Return on Equity , P / E-Price to Earnings , P / BV-Price to Book
Value , Div Yield- Dividend Yield , * price in local currency

Tanzania tops EAC GDP growth in 2016

By Kang ’ ethe Njoroge

The East African Community registered a 6.1 percent growth in 2016 even as Sub-Saharan Africa grew by 1.4 percent , according to the Economic Survey 2017 by the Kenya National Bureau of Statistics . Tanzania was the best performer recording at 7.2 percent GDP growth followed by Rwanda that grew at 6 percent . Kenya came in third recording 5.8 percent while Uganda grew by 4.9 percent . For Kenya , the slow growth led to fewer jobs created in 2016 at 832,900 compared to 841,600 in 2015 , with nearly 750,000 ( 90 percent ) of new jobs created in the informal sector . Tourism was the best performer as international arrivals went up by 13.5 percent to 1.34 million in 2016 from 1.18million in 2015 . Revenue from the sector also went up by 17.8 percent to KSh99.7 billion from KSh84.6 billion in 2015 . Information Communication and Technology was also a major driver of the economy growing at 9.7 percent in 2016 compared to 7.4 percent growth in 2015 . The value of the ICT output in the period under review went up by 11.1 percent to KSh311.1 million in 2016 from KSh280 million in 2015 . Meanwhile , Mobile subscription improved by 85.6 percent from 85.4 percent in 2015 . The value of mobile money transactions hit KSh3.4 trillion in 2016 from KSh2.8 trillion in 2015 . Other sectors that recorded growth include real estate as well as transport and storage . However , key sectors regarded as the backbone of the economy recorded slow growth . Agriculture , hampered by drought in the fourth quarter of 2016 , contracted by 1.5 percent in 2016 compared to a growth of 5.5 percent in 2015 . Manufacturing recorded a 3.5 percent growth in the period under review which is a decline compared to 3.6 percent growth in 2015 while the construction industry recorded a 9.7 percent growth in the period under review compared to a 13.9 percent growth registered in 2015 . The financial sector also recorded a decline growing by 6.9 percent in 2016 compared to 9.4 percent growth in 2015 amidst the amendment of the banking act that introduced capping of interest rates .

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