The Nairobi Securities Exchange posted a remarkable 28.5% return during the first half of 2012 – a performance strong enough to make it the world’s third strongest bourse. It should come as little surprise then, that the East African market is home to five of Africa’s 10 best-performing stocks since the first of the year.
Here’s a list of the Sub-Saharan stocks (not including South Africa) that have gained the most in US dollar terms since the start of the year.
(Note that each stock has averaged trade volume greater than $10,000 per day over the past month.)
10. United Bank for Africa +41.4% (Nigeria)
This Nigeria-based bank operates in 19 countries and has shot the lights out recently after having announced that first half earnings will likely increase by 50%.
9. Palm-CI +41.9% (Cote d’Ivoire)
The shares of Cote d’Ivoire’s largest palm oil plantation have benefited from a stabilizing political situation and strong global demand for edible oils.
8. KenolKobil +45.2% (Kenya)
This Kenyan oil retailer’s share price popped after Puma Energy, a Swiss firm, proposed a buyout of the company.
7. Kenya Reinsurance +45.3% (Kenya)
Kenya Re made shareholders very happy when it re-assessed the value of its real estate holdings upwards. Over a third of the company’s assets are invested in property – with much of it in the booming capital city, Nairobi.
6. NIC Bank +51.5% (Kenya)
This mid-sized Kenyan bank pleased the market by doubling the interest income it earned during the first three months of the year. It also plans to raise more capital from the exchange to fund expansion into Uganda and other countries in the region.
5. Societe des Caoutchoucs de Grand-Bereby (SOGB) +51.9% (Cote d’Ivoire)
Another beneficiary of the restored calm in Cote d’Ivoire, SOGB operates rubber plantations in the country’s southwest. Rubber prices are up nearly 10% since the start of the year. The stock is the only one on this list that also ranked among 2011’s top 10 performers.
4. British American Tobacco – Kenya +52.7% (Kenya)
This tobacco grower lit a fire under its share price when it nearly doubled its full year earnings in 2011. It rewarded shareholders by increasing the dividend by an equivalent amount.
3. Intercontinental WAPIC Insurance +61.2% (Nigeria)
A subsidiary of Nigeria’s up and coming Access Bank, Intercontinental WAPIC is one of the country’s oldest insurers. Its share price appears to have surged as a result of the company returning to profitability in 2011.
2. R.T. Briscoe +106.5% (Nigeria)
The Nigerian Stock Exchange’s top performer so far in 2012, this Toyota dealer also sells construction and farming equipment. This emphasis on agriculture placed it on many investors’ buy lists in May when the Nigerian president announced that the government will prioritize increased farm output.
1. Uchumi Supermarket +109.9 (Kenya)
Quite the redemption story, Africa’s star stock so far this year is a Kenyan grocer that, just a few short years ago, went bankrupt and was delisted from the Nairobi Securities Exchange. Now, the company is back, and while its share price has been volatile, investors are bullish about the company’s expansion into Tanzania and Uganda. They were also intrigued by news of financial trouble at the company’s main Kenyan rival, Tusky’s.
What Do You Think?
There you have it. Africa’s best stocks in 2012 so far. Did this list surprise you? Which stocks do you think will be among the top performers at the end of the year? Let us know in the comments!
[Disclosure: I have no position in any stock mentioned in this article, and I have no intention of taking any within the next 72 hours.]