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.
THE EXCHANGE
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