Sub-Saharan Africa’s (excluding South Africa’s) stock markets US$ returns increased by 4.5% in Dec. Top 30 report

Published On: January 17, 2023By Tags: Pan-African

In the year to September 2022, sub-Saharan Africa’s markets, excluding South Africa, have performed relatively well compared to international markets. This is a significant achievement as it is driven by strong earnings growth and overvalued stocks. This has led to investors buying these stocks, and in many cases, not selling them, which has forced prices down and provided positive returns for shareholders.

The key markets in sub-Saharan Africa that have done well include Nigeria and internationally listed stocks, which make up about 35% of the top 30 companies. Additionally, the telecoms and technology sector has also seen growth with new listings, including companies such as UAC foods in Nigeria, UAC cement in Nigeria, Orange Code d’Ivoire, and African Oil. However, there are very few companies from South Central Africa, including Zimbabwe, Zambia, Malawi, Botswana, and Namibia, that have reached the critical level of market capitalization of $800 million.

Another interesting aspect is the level of profitability of these companies, many of which have shown significant earnings growth and positive growth of US dollar earnings in 2022, even while other markets are facing issues of profitability and indebtedness.

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US$ returns by market

Seven of the fourteen Sub-Saharan Africa’s (excluding South Africa’s) stock markets have positive US$ returns year to date:

  1. Seychelles 18.5%
  2. Zambia 11.7%
  3. Tanzania 8.1%
  4. Nigeria 7.7%
  5. Malawi 7.4%
  6. Botswana 1.8%
  7. Rwanda 1.7%

Zimbabwe, Ghana, BRVM and Nigeria rose by 43.2%, 31.8%, 9.3%  and 3.6% respectively in December 2022.

Zambia fell by 4.9% in December 2022.

Fundamental valuation outliers

NOTE: Valuations figures are listed as at 31 December 2022. Please click on the company name for the updated share price.

Companies with the highest and lowest Return on Equity

  • MTN Nigeria 134.0% with a share price at 215.00 NGN
  • IHS Towers -14.4% with a share price at 6.15 USD

Companies with the highest and lowest Price to Earnings Ratio

  • BUA Cement  33.5x with a share price at 97.75 NGN
  • AVZ Minerals, IHS Towers and Helios Towers are loss making.

Companies with the highest and lowest Dividend Yield

  • MTN Ghana 14.2% with a share price at 0.88 GHS.
  • Bua Foods, IHS Towers, AVZ Minerals, Helios Towers and Geregu Power are currently not paying dividends.

Companies with the highest and lowest Price to Book Value Ratio

  • Helios Towers 26.70x with a share price at 1.06 GBP
  • First Bank Nigeria 0.44x with a share price at 10.90 NGN

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About the Author: Hartland-Peel Africa Equity Research

Sub-Saharan Africa ex SA: Equity, debt and FX research covering sixteen countries and advising institutional investors. Proprietary data base of sixteen African stock markets, 250+ companies which is one of the most extensive and complete. New issues, IPO’s and distribution of equity on privatisation. Development of lending and corporate finance opportunities for the bank, privatisation and asset management. An ‘A’ rated equity analyst by South African institutional investors as polled by the Financial Mail in 1998 and 1999.