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Sunday, June 16, 2024

Hope however limitations in East Africa

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The East African firms listed in our desk have mixed market capitalisation of $18.3bn. Kenya dominates as anticipated with $11.5bn, adopted by Tanzania with $4.4bn and Uganda with $2.3bn. Kenyan corporations now account for two.29% of the full worth of our Prime 250, up from 2.09% over the previous yr however nonetheless decrease than the two.71% achieved in our 2022 rankings. Regardless of being the fastest-growing African financial system – and the third quickest globally – over the previous 20 years, not a single Ethiopian firm makes our Prime 250 or regional Prime 20 tables, though the federal government has regularly moved in direction of loosening its grip on the financial system over the previous three years.

Kenya’s Safaricom stays the largest listed firm in East Africa by a long way, as its market capitalisation is about 4 instances as nice as the following greatest agency, Fairness Group. Safaricom is each the area’s greatest telecoms supplier and an vital participant within the monetary providers sector because of its possession of cell cash firm M-Pesa. Nonetheless, its market worth has fallen dramatically from $13.3bn in our 2021 survey to $5.4bn this yr, largely attributable to difficulties in Ethiopia – although it’s banking on Ethiopia to drive long-term progress. Though its telecoms operations there have been affected by restrictions on the import of capital items because it launched in Ethiopia in October 2022, it now has the chance to problem the market incumbent, Ethio Telecom, together with by way of M-Pesa, which has additionally secured a cell cash licence.

Tanzania Breweries takes third place with $1.3bn market capitalisation, effectively forward of its Kenyan rival East African Breweries in seventh with $783m. Uganda is represented by its two greatest telecoms firms, MTN Uganda in fourth with $978m and Airtel Uganda in sixth with $874m. Nonetheless, a lot of the remainder of the desk is stuffed by banks and different finance firms, with a complete of eight Kenyan monetary providers entries in East Africa’s Prime 20. The Nairobi Securities Change 20-share index got here shut to five,500 factors in early 2015 however had fallen to lower than 1,700 by April 2024. This fall deters funding in Kenyan shares, lowering the quantity of capital out there to Kenyan firms. Worldwide traders seem to have offered a big proportion of their Kenyan holdings, in a common retreat to established capital markets because of post-Covid financial dislocation and of rising inflation and rates of interest fuelled by the Russian invasion of Ukraine.

Though East Africa continues to be grossly underrepresented in our Prime 250, a lot of its firms are rising strongly. BK Group took twentieth place in our regional desk final yr with $215m however I&M Holdings wanted $277m to safe the identical spot this yr.


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