Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenyan Firms amongst Top Performers in Nex Rubica African Equity Capital Markets Review

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| Rea Vipingo Plantations Ltd Ord 5.00 16.45 0.00 | Sasini Ltd Ord 1.00 11.55 0.00 | AccessKenya Group Ltd Ord. 1.00 10.00 0.00 | Car & General (K) Ltd Ord 5.00 49.50 DNT | CMC Holdings Ltd Ord 0.50 10.40 -0.10 | Hutchings Biemer Ltd Ord 5.00 20.25 DNT | Kenya Airways Ltd Ord 5.00 39.50 0.00 | Marshalls (E.A.) Ltd Ord 5.00 14.20 DNT | Nation Media Group Ord. 2.50 173.00 -1.00 | Safaricom Ltd Ord 0.05 4.20 0.05 | Scangroup Ltd Ord 1.00 60.00 -0.50 | Standard Group Ltd Ord 5.00 39.50 DNT | TPS Eastern Africa (Serena) Ltd Ord 1.00 66.50 0.00 | Uchumi Supermarket Ltd Ord 5.00 14.50 DNT | Barclays Bank Ltd Ord 2.00 69.50 0.50 | Centum Investment Co Ltd Ord 0.50 22.25 0.25 | CFC Stanbic Holdings Ltd ord.5.00 79.00 0.00 | Diamond Trust Bank Kenya Ltd Ord 4.00 146.00 -1.00 | Equity Bank Ltd Ord 0.50 28.75 0.25 | Housing Finance Co Ltd Ord 5.00 28.00 0.75 | Jubilee Holdings Ltd Ord 5.00 187.00 1.00 | Kenya Commercial Bank Ltd Ord 1.00 23.25 0.25 | Kenya Re-Insurance Corporation Ltd Ord 2.50 10.60 -0.10 | National Bank of Kenya Ltd Ord 5.00 47.00 0.50 | NIC Bank Ltd 0rd 5.00 52.00 0.50 | Olympia Capital Holdings ltd Ord 5.00 5.00 0.05 | Pan Africa Insurance Holdings Ltd 0rd 5.00 76.00 -3.50 | Standard Chartered Bank Ltd Ord 5.00 275.00 3.00 | The Co-operative Bank of Kenya Ltd Ord 1.00 20.25 0.25 | Athi River Mining Ord 5.00 180.00 -1.00 | B.O.C Kenya Ltd Ord 5.00 150.00 DNT | Bamburi Cement Ltd Ord 5.00 197.00 0.00 | British American Tobacco Kenya Ltd Ord 10.00 280.00 6.00 | Carbacid Investments Ltd Ord 5.00 145.00 -1.00 | Crown Berger Ltd 0rd 5.00 32.50 -1.50 | E.A.Cables Ltd Ord 0.50 19.15 -0.40 | E.A.Portland Cement Ltd Ord 5.00 100.00 -3.00 | East African Breweries Ltd Ord 2.00 181.00 1.00 | Eveready East Africa Ltd Ord.1.00 2.55 0.00 | KenGen Ltd Ord. 2.50 15.50 -0.05 | KenolKobil Ltd Ord 0.05 9.40 -0.10 | Kenya Power & Lighting Co Ltd Ord 2.50 22.50 0.50 | Mumias Sugar Co. Ltd Ord 2.00 8.10 -0.30 | Sameer Africa Ltd Ord 5.00 6.15 -0.05 | Total Kenya Ltd Ord 5.00 28.00 0.25 | Unga Group Ltd Ord 5.00 10.35 -0.10 | City Trust Ltd Ord 5.00 186.00 DNT | Eaagads Ltd Ord 1.25 50.00 -4.50 | Express Ltd Ord 5.00 7.50 -0.20 | Williamson Tea Kenya Ltd Ord 5.00 200.00 0.00 | Kapchorua Tea Co. Ltd Ord Ord 5.00 125.00 DNT | Kenya Orchards Ltd Ord 5.00 3.00 DNT | Limuru Tea Co. Ltd Ord 20.00 305.00 DNT | Kakuzi Ord.5.00 77.00 -3.00 | Rea Vipingo Plantations Ltd Ord 5.00 16.45 0.00 | Sasini Ltd Ord 1.00 11.55 0.00 | AccessKenya Group Ltd Ord. 1.00 10.00 0.00 | Car & General (K) Ltd Ord 5.00 49.50 DNT | CMC Holdings Ltd Ord 0.50 10.40 -0.10 | Hutchings Biemer Ltd Ord 5.00 20.25 DNT | Kenya Airways Ltd Ord 5.00 39.50 0.00 | Marshalls (E.A.) Ltd Ord 5.00 14.20 DNT | Nation Media Group Ord. 2.50 173.00 -1.00 | Safaricom Ltd Ord 0.05 4.20 0.05 | Scangroup Ltd Ord 1.00 60.00 -0.50 | Standard Group Ltd Ord 5.00 39.50 DNT | TPS Eastern Africa (Serena) Ltd Ord 1.00 66.50 0.00 | Uchumi Supermarket Ltd Ord 5.00 14.50 DNT | Barclays Bank Ltd Ord 2.00 69.50 0.50 | Centum Investment Co Ltd Ord 0.50 22.25 0.25 | CFC Stanbic Holdings Ltd ord.5.00 79.00 0.00 | Diamond Trust Bank Kenya Ltd Ord 4.00 146.00 -1.00 | Equity Bank Ltd Ord 0.50 28.75 0.25 | Housing Finance Co Ltd Ord 5.00 28.00 0.75 | Jubilee Holdings Ltd Ord 5.00 187.00 1.00 | Kenya Commercial Bank Ltd Ord 1.00 23.25 0.25 | Kenya Re-Insurance Corporation Ltd Ord 2.50 10.60 -0.10 | National Bank of Kenya Ltd Ord 5.00 47.00 0.50 | NIC Bank Ltd 0rd 5.00 52.00 0.50 | Olympia Capital Holdings ltd Ord 5.00 5.00 0.05 | Pan Africa Insurance Holdings Ltd 0rd 5.00 76.00 -3.50 | Standard Chartered Bank Ltd Ord 5.00 275.00 3.00 | The Co-operative Bank of Kenya Ltd Ord 1.00 20.25 0.25 | Athi River Mining Ord 5.00 180.00 -1.00 | B.O.C Kenya Ltd Ord 5.00 150.00 DNT | Bamburi Cement Ltd Ord 5.00 197.00 0.00 | British American Tobacco Kenya Ltd Ord 10.00 280.00 6.00 | Carbacid Investments Ltd Ord 5.00 145.00 -1.00 | Crown Berger Ltd 0rd 5.00 32.50 -1.50 | E.A.Cables Ltd Ord 0.50 19.15 -0.40 | E.A.Portland Cement Ltd Ord 5.00 100.00 -3.00 | East African Breweries Ltd Ord 2.00 181.00 1.00 | Eveready East Africa Ltd Ord.1.00 2.55 0.00 | KenGen Ltd Ord. 2.50 15.50 -0.05 | KenolKobil Ltd Ord 0.05 9.40 -0.10 | Kenya Power & Lighting Co Ltd Ord 2.50 22.50 0.50 | Mumias Sugar Co. Ltd Ord 2.00 8.10 -0.30 | Sameer Africa Ltd Ord 5.00 6.15 -0.05 | Total Kenya Ltd Ord 5.00 28.00 0.25 | Unga Group Ltd Ord 5.00 10.35 -0.10 | City Trust Ltd Ord 5.00 186.00 DNT | Eaagads Ltd Ord 1.25 50.00 -4.50 | Express Ltd Ord 5.00 7.50 -0.20 | Williamson Tea Kenya Ltd Ord 5.00 200.00 0.00 | Kapchorua Tea Co. Ltd Ord Ord 5.00 125.00 DNT | Kenya Orchards Ltd Ord 5.00 3.00 DNT | Limuru Tea Co. Ltd Ord 20.00 305.00 DNT

Kenyan Firms amongst Top Performers in Nex Rubica African Equity Capital Markets Review

Monday, 01 September 2008

Despite the impact of the political crisis in early 2008, Kenyan stocks have been amongst the best performers in Nex Rubica’s Top40 and Mid45 indices of stocks in sub Saharan and north African equities.

Nex Rubica’s African Equity Capital Markets Review notes that African equity markets have been relatively resilient to contagion from most global and emerging market equity indices. This improves the outlook for Africa as a destination for managed funds, a trend led by, amongst others, Nigeria, Egypt, Kenya and Morocco.

Nex Rubica’s Top100 index, which is composed of equities in both sub-Saharan Africa and northern Africa, has outperformed comparable indices like the Standard and Poor’s Pan Africa, the FTSE All Emerging, and the RenCap SSA index, rising 5.1% in the first half of 2008. The company’s Mid45 Index and Top40 Index, also composed of sub-Saharan African and north African equities, dropped by 5.57% and 9.76% respectively. This, Nex Rubica argue, can be explained by the increased sensitivity of African blue chip stocks to foreign investor revaluation and repayment risks. Their data show that 18 months ago, Africa had a more negative correlation to major indices, but that the increase of foreign investment in the region also makes them more susceptible to price shocks.

Despite the disruptions to business in early 2008 following the disputed December 2007 elections, Kenyan firms are well represented in the Top40 and Mid45 indices in the first half of 2008: In the Top40 index, Equity Bank is the best performer with an increase in the mean return of 71.62%, followed by East African Breweries (EABL) on rank 8 with 16.93%. In the overall index, Kenya leads with an increase in the mean returns by 29.85%, followed by Morocco with 11.92%. With regard to price increases, Kenya leads the Top40 index with Equity Bank’s 51.14%. In the Mid45, Athi River Mining is ranked seventh with an increase in the mean return of 10.21%, and Nation Media Group ranked tenth with 7.10%.

Equity Bank and National Bank of Kenya were also amongst the fastest rising companies (20% to 60% increase) in the Top200 in the first half of 2008, and East African Breweries, Equity Bank and Kenya Commercial Bank have outperformed the Top40 index. The strong performance in Kenya’s banking stocks is also reflected in traded values rising from USD182.7m in the second half of 2007 to USD257.92m in the banking sub sector in the Top40 index, compared to an overall decline in volumes by USD3.2bn. That Kenya performed so well was, in the analysis of Nex Rubica, driven by the rapid recovery from the post-election crisis. Investors returned quickly, and demand for blue chips pursuing regional growth in the East African Community (EAC) rose.

Background

Nex Rubica Analytics, is an independent firm specializing in fundamentals based quantitative equity research. Founded in 2005, the firm offers several investment research products for professional money managers and individual investors. Nex Rubica's proprietary Index and Corporate Default Rating methodology employs various approaches, some of which include: default frequencies, multi-factor filters and Monte Carlo, to analyze nearly 1,000 Africa-traded stocks. Identifying those that appear poised to outperform or under-perform the market. Nex Rubica Analytics has a research team that develops, distributes and optimizes portfolio construction tools based on sophisticated models for stock selection, asset allocation and risk management.

Nex Rubica Indices

Nex-Rubica intends for its indices to be rapidly tradable and active for investment strategies. Instituted in November 2005, the Nex Rubica Africa 40 Index serves as a measure of liquid investment available to non-nationals in the global emerging equity markets. The objective of the Africa 40 Index is to create a representative benchmark of markets and shares that international investors can realistically buy or sell individually or as a basket.

The Top 40 Index ranks shares with a minimum market cap of USD700m and a free float of greater than 25% within each issuer. It applies cross-ownership and local legal restrictions and foreign limits to stocks with a market cap greater than 1% of each country's total. The Extended Nex-Rubica All Africa 100 Index coverage is broader and deeper than competitor indices (i.e. S&P, IFCI and the MSCI series), and has a total market capitalisation of USD190.3bn.

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