Resources Archives - Investing in Africa

The Complete List of African ADRs and GDRs

If you live in the USA or UK and are looking for the most convenient way to invest in individual African stocks, your best bet is to acquaint yourself with the growing number of African ADRs and GDRs.

Here’s a complete list of those trading in New York, London, Germany, and Paris.

Depositary receipts (DRs) represent the shares of a foreign company. Banks issue these receipts so that investors can trade shares of popular foreign stocks on their local stock exchange without the need to open a foreign brokerage account.

In the US, these instruments are known as ADRs (American Depositary Receipts). Everywhere else in the world, they are known as GDRs (Global Depositary Receipts). I’m not sure why us Yanks need to call them something different. Maybe we just like to think we’re special.

Convenient But With Limitations

Anyway, if you look closely at the list below, you will notice the following:

The vast majority of African ADRs and GDRs are for South African companies. There’s a handful of Nigerian and Zambian stocks, but very few in relation to those headquartered south of the Limpopo River. Thus, investors who limit their African holdings to ADRs are overly exposed to the South African economy and its currency, the Rand.

Most African ADRs and GDRs are very illiquid. Roughly half had no trade volume to speak of over the past 30 days, and very few average more than 10,000 shares traded per day. This can cause problems for investors. It’s not always easy to find a willing buyer or seller of the ADRs at the market price.

Metals and mining companies are disproportionately represented among African ADRs and GDRs. Moreover, they account for roughly half of the ADRs with the highest trade volumes. This doesn’t help investors profit from one of the continent’s most attractive opportunities – the rising wealth of the African consumer.

So African ADRs and GDRs don’t yet offer investors broad exposure to African capital markets. They are, however, a nice way for investors new to the region to get their feet wet. And more sub-Saharan depositary receipts are sure to hit foreign markets soon. By my count, 24 new ADRs listed on US markets within the past two years.

Here’s a list of those currently available with average daily trade volume greater than $10,000.

African ADRs and GDRs

ADR/GDR	Country	Industry
Anglo American Platinum (AGPPY)	South Africa	Mining
AngloGold Ashanti (AU)	South Africa	Mining
Aspen Pharmacare (APNHY)	South Africa	Pharmaceuticals
Barclays Africa Group (AGRPY)	South Africa	Banking
Barloworld (BRRAY)	South Africa	Industrial
Bidvest (BDVSY)	South Africa	Industrial
Clicks Group (CLCGY)	South Africa	Retail
DRDGold (DRD)	South Africa	Mining
Exxaro Resources (EXXAY)	South Africa	Mining
Gold Fields (GFI)	South Africa	Mining
Guaranty Trust Bank (London: GRTB)	Nigeria	Banking
Harmony Gold Mining (HMY)	South Africa	Mining
Impala Platinum (IMPUY)	South Africa	Mining
Imperial Holdings (IHLDY)	South Africa	Industrial
Kumba Iron Ore (KIROY)	South Africa	Mining
Massmart Holdings (MMRTY)	South Africa	Retail
Mediclinic International (MCFFY)	South Africa	Healthcare
MiX Telematics (MIXT)	South Africa	Technology
Mr Price Group (MRPLY)	South Africa	Retail
MTN Group (MTNOY)	South Africa	Telecom
Murray & Roberts (MURZY)	South Africa	Construction
Nampak (NPKLY)	South Africa	Packaging
Naspers (NPSNY)	South Africa	Media
Nedbank (NDBKY)	South Africa	Banking
PPC (PPCYY)	South Africa	Cement
Sanlam (SLLDY)	South Africa	Insurance
Sappi (SPPJY)	South Africa	Paper
Sasol (SSL)	South Africa	Energy
Shoprite (SRGHY)	South Africa	Retail
Sibanye Gold (SBGL)	South Africa	Mining
Standard Bank Group (SGBLY)	South Africa	Banking
Telkom (TLKGY)	South Africa	Telecom
Tiger Brands (TBLMY)	South Africa	Packaged Food
Vodacom (VDMCY)	South Africa	Telecom
Woolworths (WLWHY)	South Africa	Retail
Zambeef Products (London: ZAM)	Zambia	Food

It’s Your Turn

Have I missed any African ADRs or GDRs? If so, let me know in the comments!

The Zimbabwe Stock Exchange’s New Website Is Fantastic

After a bewilderingly long, one-year hiatus, the Zimbabwe Stock Exchange once again has a website.

It was definitely worth the wait.

Among African stock exchange websites, the ZSE has, in my view, moved from worst to first. Here’s why.

After a bewilderingly long, one-year hiatus, the Zimbabwe Stock Exchange once again has a website.

It was definitely worth the wait.

Among African stock exchange websites, the ZSE has, in my view, moved from worst to first.

Here are a few of my favorite features:

1) It’s got a huge amount of price and trading data.
The new site posts a daily price sheet, which is more than some African websites can claim. But it doesn’t stop there. It also highlights the days biggest gainers and losers, and even shows you which stocks are most popular with foreign investors. Even more impressive are the customizable price charts for each stock.

2) It boasts a huge library of downloadable financial reports for listed companies.
Are you researching a potential investment in Zimbabwe? Make sure to read through its annual report and most recent results first. You can find them all on ZSE’s website by clicking on each company’s document archive.

3) It compiles some helpful ratios and fundamental financial data.
The ZSE now shows P/E ratios, P/B ratios, and financial statement extracts. It looks very much like something you would see on Bloomberg.com or Yahoo! Finance. This will obviously require a lot of maintenance to keep current. Hopefully, ZSE’s management is committed to doing so, as it is a huge service to investors looking to screen the field of potential investments.

4) It clearly outlines the costs involved with trading.
You can find the complete fee schedule here, which breaks down trading costs by line item.

5) There’s a really nice page outlining taxation in Zimbabwe.
Everything most stock investors would want to know about the country’s tax regime is helpfully explained.

6) The site’s fast, got a clean look, and is relatively easy to navigate.
I’m impressed by how quickly the website loads, and the drop-down menus in the navigation bar organize a huge volume of information in an accessible way.

7) It’s in beta so still open for suggestions!
Perhaps the nicest thing about the new website is that the designers acknowledge that it is a work-in-progress. The site clearly notes that it is still in beta, and it includes a form for users to submit suggestions for making it more useful and user-friendly.

In light of the above, here are a few suggestions for making the site even better.

I would like to see a bit more detail on how to open a brokerage account and begin trading shares. Currently, this information is touched on in the FAQ, but readers are directed to brokers for instructions on how to open an account. It would be helpful if the ZSE walked step-by-step through the process of opening an account (required forms, disclosure of personal information, account minimums, etc), described the process of how a trade is actually executed (placing an order, settlement), and discussed how to collect dividends and (for international investors) how to repatriate funds.
It would be terrific if the site would keep track of the current dividend yield for each stock. It looks like this is in process, but I’m an impatient sort of guy.
Finally, the navigation menu is pretty intuitive, but the drop down menus could stand for some consolidation. I know that this is easier said than done, and my own website is no model citizen in this regard, but the “Market Data” menu is a bit overwhelming and drops all the way off the bottom of my laptop’s screen.

Who’s Next?

Those small quibbles aside, kudos to the ZSE and the developers for putting together such a useful site. You’ve really raised the bar.

Now, which exchange will rise to this new precedent? Namibia? Ghana? It’s your move.

Grading African Stock Exchange Websites
The Nigerian Stock Exchange Website Ups Its Game

New Resource: The African Financial Statement Library

You may have noticed that my posting frequency has slackened over the past couple months. This is due to a couple new projects that I’m really excited about. And I’d like to unveil one of them today — the African Financial Statement Library.

If you spend much time researching or analyzing African stocks, you’ve likely spent a lot of time tracking down financial data. Many African companies still don’t have websites with proper investor relations sections, and the data provided by the stock exchanges themselves can be spotty.

So, we’re going to try to address this problem. The Library is a free collection of downloadable annual reports and financials for African listed companies. You can access it via the “Library” tab in the menu at the top of the page.

We’ve currently archived roughly 1400 reports. This is far from a comprehensive archive, but we add new reports regularly, so the collection will become more useful with each passing day.

If you can’t find what you’re looking for here, I suggest trying the extensive collection of reports at www.africanfinancials.com or the other resources listed in this article.

Finally, I invite you to help us build the library. If you would like to contribute a financial report that doesn’t currently appear in the library, just send it my way at ryan@investinginafrica.net, and we’ll make sure it gets uploaded.

Happy Investing!

Hitch Your Investments to Africa’s Demographic Freight Train

Last month, I explored the implications of Africa’s demographic dividend for stock investors.

I don’t want to belabor the topic, but if that series of posts was interesting to you then take a moment to read through “Africa’s Demographic Freight Train,” by Greg Barker of the Mauritius-based asset manager, Sustainable Capital. I found it fascinating.

Last month, I explored the implications of Africa’s demographic dividend for stock investors.

All Aboard the Growth Train!

Here are some of the report’s key points:

Population trends are highly predictable. Like a freight train, they are rarely derailed. This makes them a highly useful complement to “bottom-up” stock analysis.
Economic growth tops out when a nation’s population is dominated by young adults and brakes sharply as the overall population ages.

Stock market returns generally reach their peak when the population is dominated by adults in their late-40s. This age group sees retirement on the horizon and prepares for it by saving and investing, thus driving up share prices.
Bond returns hit their max when a population grays. Retired folks begin to shun stocks and replace them with fixed income investments.
African nations are among the youngest in the world, putting them at the very beginning of the above cycle. Their current age distribution resembles that of the US circa 1960.
Infrastructure constraints and instability resulting from high unemployment are the biggest threats to Africa’s economic and capital market growth.
African banks, real estate companies, and consumer goods companies are particularly attractive ways to board the demographic freight train.

There’s loads more to digest in the report, so if you’ve read this far, please do have a look.

The Nigerian Stock Exchange Website Ups Its Game

Kudos to the folks running the Nigerian Stock Exchange’s revamped website!

You may recall that I complained about the confusing format in which the exchange published listed company results in a post last week.

Well, it appears that the squeaky wheel gets the grease!

Kudos to the folks running the Nigerian Stock Exchange’s revamped website!

You may recall that I complained about the confusing format in which the exchange published listed company results in a post last week.

Show Me The Numbers!

Well, could it be that the squeaky wheel gets the grease? On the day after I posted my gripe, the published results changed from this nearly useless format to this clean, easy-to-read one.

Well done, NSE, and thank you! You’ve now got a top-notch website, and you’ve made the job of an investment analyst so much easier.

Now, if I may be so bold … why aren’t Nigeria’s listed companies required to submit a cash flow statement with their interim results?

To stay current with all the latest financial results for Nigerian stocks, bookmark this page: Nigerian Stock Exchange — Financial Results.

Category: Resources