As you can see above majority of African equity markets took a big hit in 2015 and underperformed on a large scale. From the data we sought, only 3 exchanges ended 2015 on a positive:
- BVRM Exchange which comprises member countries of the West African Economic and Monetary Union. BVRM Composite Index ended 2015 up by 18.49%.
- Botswana Domestic Companies Index was up by around 11.58%. We took note of a company called Sechaba Breweries which has an impressive 60.9% ROE (Return on Equity). Sechaba Breweries is an an investment holding company with interest in Kgalagadi Breweries (Pty) Limited (KBL). Sechaba holds 60% of the shares of KBL while SABMiller Botswana B.V. holds 40%.SABMiller Plc has management control in the operating company. Their involvement brings management, technical and brand building expertise of the three largest brewing companies in the world to KBL.
- South African equities managed to end on a positive by 2.4% (JSE All Share Index), despite emerging markets facing mounting risks due to the Fed Rate hike and exacerbated further by the rout in commodity prices.
Zimbabwe Stock Exchange was the worst performing equities market in Africa. 25 companies in the ZSE have negative earnings per share. 6 out of the top 10 listed companies by market capitalization took a big hit with Econet Wireless leading the pack down almost 64.25% in 2015. We demonstrate this in the data below.
Conclusion
It has been a really tough year (2015) in the African markets, looking on the bright side valuations have come down and one can be able to find quality companies at good values with a long term view typically 5 – 10 years.
Feel free to share with us your thoughts.
Remember investing is simple, but not easy!!!
