The Lusaka Stock Exchange (LuSE) has continued-on from a strong 2013 to close the first half of 2014 at 6,111.15, up 15.3%. The market capitalization was at K28.1bn (K62.3bn including Shoprite) as of yesterday, June 30th 2014:
The LuSE index broke the 6,000 mark for the first time in its 20 year history in April and peaked at an all-time high of 6,149.66. The index is also set to list its 23rd stock - Madison Financial Services - whose Initial Public Offering opened on June 25th 2014.
Top 3 Stocks
1. ZCCM Investment Holdings (ZCCM-IH)
ZCCM-IH has had the strongest performance in the first half of the year – the stock is up 134.9% with a market cap of K6.4bn. They recently added a director to represent minority shareholders to the board and had a claw-back rights issue.
2. Lafarge Cement Zambia (Lafarge)
Lafarge has had a very strong start to the year with the stock up 65%. This came one the back of a strong financial year 2013 performance. Construction has been one of the major drivers of the Zambian economy and Lafarge, under new CEO Emmanuel Rigaux, is finely positioned to continue benefiting.
3. Zambia Breweries (Zambrew)
Zambia Breweries shares are up 37.9%in the first half of this year off the back of strong 2013 numbers which saw profit after-tax increase by 67% year-over-year. This is despite a sharp fourth quarter decline in beer volumes caused by the increase in excise duty on clear beer to 60%.
Bottom 3 stocks
1. First Quantum Minerals (FQMZ)
First Quantum’s good 2013 performance hasn’t prevented the stock price from declining by 6.98% in the first half of the year. Copper and Gold (FQMZ’s mainstays) prices have declined by quite a lot from their all-time highs but have slowly started making a come-back. The mining sector cost-base has also been adversely impacted by recent electricity and fuel price hikes. FQMZ is also one of the firms affected by the $600m VAT refund which is currently being withheld by the ZRA.
2. Copperbelt Energy Corporation (CEC)
CEC shares are down 5.5% in the first half of 2014. The company recently reorganized its ownership structure and raised K387.5m in a rights offer in the first quarter of this year.
3. Prima Reinsurance (Prima Re)
Prime Reinsurance is down 3.3% in the first half of 2014. This is despite robust 2013 earnings which saw gross written premiums and profit after-tax increase by 17% and 17.5%, respectively. The company is trading below its IPO price of K3.
The second half of the year is finely poised – could we see the LuSE index breaching the 7,000 mark? Finance Bank finally going public?
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *