Select Global Equity Index Movements
30-Sep-11 | 31-Dec-11 | Change | |
Developed | |||
S&P 500 (USA 500 Share) | 1,131.42 | 1,257.60 | +11.15% |
Nikkei (Japan 225 Share) | 8,700.29 | 8,455.35 | -2.82% |
FTSE 100 (UK 100 Share) | 5,128.48 | 5,572.28 | +8.65% |
Advanced Emerging | |||
Sensex (India 30 Share) | 16,453.76 | 15,454.92 | -6.07% |
SSE (Shanghai, China All Share) | 2,359.22 | 2,199.42 | -6.77% |
Bovespa (Brazil 50 Share) | 52,324.42 | 56,754.08 | +8.47% |
JSE (South Africa All Share) | 29,674.20 | 31,985.67 | +7.79% |
Emerging Africa | |||
NGSE (Nigeria All Share) | 20,373.00 | 20,730.63 | +1.76% |
GSE (Ghana All Share) | 1,098.38 | 969.03 | -11.78% |
NSE - 20 (Nairobi 20 Share) | 3,284.06 | 3,205.02 | -2.41% |
The last quarter of 2011 marked the end of a tumultuous year for most countries, following economic upheavals in Europe and Asia, as well as political changes that led to the Arab Spring. However, a good number of the global indices improved in the period as a result of steps taken by the European Central Bank and EU finance ministers to control the issue of sovereign debt, particularly in Italy and Spain. Talks are currently underway between European leaders and Greece’s creditors on how best to reduce the country’s debt and mitigate the impact it has had on the European economy. It is hoped that these efforts, together with a five-year plan to implement austerity measures, will aid in the Greek economy’s recovery.
In light of the events on the European front, Asian indices fell towards the end of 2011 due to a drop in exports to western markets, major scandals such as the case of accounting fraud at Olympus Corporation in Japan as well as an overall decline in investor confidence.
The African indices also felt the impact of the economic crises around the world which, coupled with fluctuating prices of the vital commodities, led to their poor performance.
Select Commodities Price Movements
30-Sep-11 | 31-Dec-11 | Change | |
Agricultural | |||
Tea - Mombasa Auction $/kg | 3.14 | 2.92 | -7.01% |
Tea - Mombasa Auction Volume 000's/kgs | 4,905.00 | 6,452.00 | +31.54% |
Coffee (NYBOT) cents/lbs : Closest futures | 228.90 | 226.85 | -0.90% |
Wheat (CBT) cents/60lb: Closest futures | 609.25 | 652.75 | +7.14% |
White Sugar LIFFE USD/Tonne | 663.30 | 602.00 | -9.24% |
Palm Oil $ Malay Spot | 1,010.00 | 1,040.00 | +2.97% |
Cocoa £/Tonne LIFFE: Closest futures | 1,699.00 | 1,380.00 | -18.78% |
Crude oil | |||
Brent Blend(dated): Spot | 102.76 | 107.71 | +4.82% |
Metals | |||
Gold COMEX $/100oz: Closest futures | 1,620.00 | 1,566.80 | -3.28% |
Copper COMEX (High Grade): Closest futures | 310.35 | 343.15 | +10.57% |
There was a notable drop in the prices of tea, coffee, white sugar and cocoa, which fell hardest. Cocoa export volumes from Ghana and Ivory Coast remained high despite economic uncertainty in Europe, a major consumer. This led to the fall in prices as traders adapted to the situation.
Sugar prices also dropped in anticipation of improved climatic conditions in Brazil, which would result in increased supply.
Other commodities like copper went up driven by renewed demand from China, the world’s leading consumer of the metal. In December the country imported over 500,000 tonnes of the metal, an indication that the positive steps in Europe have buoyed investor confidence in Asia. Oil also experienced increases attributable to tension in major oil producing countries such as Libya, Iran and more recently Nigeria, which drove the price up due to limited supply.
Ghana Stock Exchange: Biggest movers
30-Sep-11 | 31-Dec-11 | Change | |
Gainers | |||
Benso Oil Palm Plantation | 0.82 | 1.10 | +34.15% |
HFC Bank | 0.36 | 0.45 | +25.00% |
Mechanical Lloyd | 0.10 | 0.11 | +10.00% |
Losers | |||
PZ Cussons | 1.40 | 0.24 | -82.86% |
Total Ghana | 30.00 | 19.83 | -33.90% |
Cocoa Processing Company | 0.03 | 0.02 | -33.33% |
Benso Oil Palm Plantation
The company’s profit after tax rose to GHc 8.3M from GHc 1.9M in the previous year, representing an impressive increase of 338%. The company was able to achieve these results under the new management of a Singaporean company, WILMAR.
Production of palm kernel also went up by 30% from 2,271 tonnes to 2,572 tonnes.
Nairobi Securities Exchange: Biggest Movers
30-Sep-11 | 31-Dec-11 | Change | |
Gainers | |||
Williamson Tea | 185.00 | 282.00 | +52.43% |
City Trust | 210.00 | 280.00 | +33.33% |
Kapchorua Tea | 99.50 | 125.00 | +25.63% |
Losers | |||
CFC Insurance | 10.00 | 6.55 | -34.50% |
Housing Finance | 16.45 | 12.40 | -24.62% |
Olympia Capital | 30.00 | 24.00 | -23.81% |
Williamson Tea
Williamson Tea reported a strong performance for the six months to September 30, 2011. Earnings per share rose by over 100% from 24.18 to 50.50. The good performance was attributable to increased crop, a favorable exchange rate (weak Kenya shilling) and sustained high prices for tea: Kenyan tea traded at between USD 2.8 and USD 3.00 per kilo for of the year.
All tea stocks performed well in the year, posting gains while the market as a whole dropped.
At the current price the share is very cheap; trading at a PE of 2.77 based on the six months to September 30, 2011 results. However agricultural stocks have tended to trade at low valuations at the NSE over the years with share prices being very volatile. It remains to be seen what impact the recent wave of destruction of tea by frost will have on the company in the current quarter.
CFC Insurance
Like several other companies listed at the NSE, CFC Insurance was affected by inflation, rising interest rates and general bear market conditions.
Insurance companies are expected to post weak results due to underperformance of the NSE in 2011 which is bound to hit investment income.
CFC’s rival British American announced (on January 10, 2012) that 2011 profits will be at least 25% less than those for 2011. The sell-off of CFC Insurance appears to be overdone: the current share price translates to a market value of Kshs 3.3 Billion which is less than 50% of the Kshs 8.7 Billion and Kshs 8.4 Billion market values of Jubilee Insurance and British American respectively.
Quote
George Bernard Shaw
