East Africa stockmarkets posted mixed results in the past year, with investors shying away from the bourses, making 2017 a challenging period for several counters.
There were policy changes in Tanzania, a prolonged electioneering period in Kenya and negative growth outlooks in Rwanda and Uganda.
Overall, the Uganda Securities Exchange (USE) registered the biggest growth — measured by the All Share Index performance.
The USE All Share Index performance rose 63.8 per cent from 1,477 points at the start of the year to 2001 points currently, followed by the Nairobi Securities Exchange (NSE), whose performance was up 21 per cent from 134.1 in January to 170.
The USE however recorded mixed results throughout the year due to the falling shilling and disinterest from institutional investors.
In the first quarter, the USE All Share Index dropped to 1689.56 points before gaining to the current 2001 points, while market capitalisation increased to $7.5 billion. There are 16 companies listed on USE — eight locally while the rest are cross-listed on the NSE.
“We still hope that institutional investors will come in this coming year so that the market can move in an upward trajectory,” said the chief executive of Alpha Capital, Stephen Kaboyo
The Dar es Salaam Stock Exchange (DSE) All Share Index rose by 9.4 per cent from 2169.01 at the start of the year to 2394.65, while the Rwanda Securities Exchange (RSE) index rose marginally by 4.5 per cent, from 127.26 in January to 133.48, last month, data from Reuters shows.
In the first quarter, for instance, the DSE market capitalisation plunged by 90 per cent to $3.29 billion, before recovering to hit $10.23 billion.
DSE chief executive Moremi Marwa blamed the fall on foreign investors selling off their stocks, which tightened the stockmarket’s liquidity, following a change of government policies especially in the mining sector, which has several listed firms.
“This drop was as a result of selling pressure emanating from social-economic needs in the first quarter and decreased foreign investor’s activity,” said Mr Marwa.
The Tanzania Share Index, which tracks listed firms’ performance, recorded an increase of 6.17 per cent to 3919.25 points, up from 3,677.82 points at the start of this year.
The DSE has 18 listed firms cutting across the banking, energy, manufacturing, agriculture, insurance, mining and commercial services sectors, with seven of them crosslisted on the NSE.
The Nairobi bourse has been erratic, with an uptick in the NSE-20 index of 12.4 per cent before August when Kenya held its general election, though market turnover remained relatively flat.
In the build up to the polls, the index remained largely unchanged, though market turnover took a hit with most investors remaining jittery.
Foreign investors have however had a great year at the NSE especially after the repeat presidential elections in October, that saw dollar adjusted earnings rise by more than 32 per cent, market data compiled by African Alliance shows.
“The elections came with the market being stuck in a bearish run that has persisted for over two years now. The NSE-20 has been on a constant decline in the period, with the market turnover remaining relatively low.
On the flip side, the bearish run has seen an uptick in foreign interest with the foreign participation averaging 66 per cent during this period,” African Alliance analysts said in their market review during the electioneering period.
The returns have been boosted by a stable shilling, coupled with rising share prices among the stocks that constitute the NSE FTSE indices.
“The FTSE NSE Kenya 15 gained 0.7 per cent to close the week at 211 points on the back of gains in Kenya Airways, Scan Group and TPS East Africa.
The index is up 30.6 per cent year-to-date, or up 29.9 per cent in dollar terms,” said African Alliance in its latest African markets weekly report.
NSE also saw its outflows rise to $115 million in the 11 months to the end of November, data from Standard Investment Bank shows.
“The stable shilling this year has helped attract investors. They have been active on the stockmarket because that’s where yields are looking up.
“We have seen the central bank rate re-priced for a while so the value of bonds and other cash assets like fixed deposits have been stable and the yields are really not going very high,” NSE chief executive Geoffrey Odundo said in October, adding that to boost liquidity, the stockmarket plans to launch a derivatives market in 2018.
The Rwanda All Share Index has risen marginally to 133.48 points from 127.26 at the start of the year, having dropped from its all-time high of 164.37 at the start 2016.
The market capitalisation currently stands at $3.4 billion, a 10.2 per cent drop from $3.89 billion at the start of the year.
Crystal Telecom, Bralirwa and Bank of Kigali counters were the most active this year, but the former’s stocks dropped marginally by three per cent, attributed to retail investors.