- Zambia has ranked the best performing stock market in Africa week to date
- Malawi stock market has ranked the second best performing week to date African bourse despite prevailing harsh economic environment
- Both stock markets have strong positve performance forecast for the year
Zambia (LuSE)-The Positive Outlook of the African Bourse
Harare-In the past week, the All-Share Index rose 7.59%, ranking the best performing stock market in Africa. The bourse registered growth on the back of a remarkable 17% surge in the Utilities sector, primarily due to Copperbelt Energy Corporation Plc's share price, which rose 33% to K5.00, with a trailing P/E ratio of 12.5x, higher than the Electric Utilities industry in Africa's average of 10x reflecting an even more positive sentiment towards the company.
The recent growth in the LuSE is not just a short-term trend; it is supported by a total return of 18% over the past 12 months. Additionally, earnings are projected to rise by 88% on an annual basis, further highlighting the positive outlook for investors and market enthusiasts.
Apart from the growth in the market, a recent announcement by US VP Harris further boosts investor confidence. The announcement of US$1 billion in public and private funding for programs to empower women economically is a step in the right direction towards economic growth and development.
The positive outlook for the African stock market is further supported by the global trend towards sustainable investments. The demand for sustainable investment options has grown significantly in recent years, with investors showing a preference towards companies that prioritize social and environmental welfare.
Zambia have shown remarkable progress towards sustainable development, and companies such as Copperbelt Energy Corporation Plc with a trailing P/E ratio of 12.5x over 10x industry P/E ratio, which are leading by example, stand to gain from this trend.
Malawi (MSE)- Navigating Stormy Waters
Malawi Stock Exchange has ranged the second-best performing stock market in Africa week to date. Market is up 3.3% over the last week, with the Financials sector leading the way, up 3.8%. The market is up 76% over the last 12 months.
Investors have a positive outlook on the Malawian market and feel certain that it will experience robust growth in the long run. The current PE ratio of 17.7x is higher than the 3-year average of 14.7x.
However, this seems to be in stark contrast to the current state of the Malawi economy, which is facing extreme levels of poverty, foreign aid dependency, and the devastating effects of climate change and drought. The country is also grappling with galloping inflation, corruption, and the severe impacts of Cyclone Fred.
Malawi's economic outlook for 2023 is, however, optimistic of growth, with growth expected to be driven by an expanding agricultural sector, foreign investment, and economic reforms. These measures, such as tax reductions, the liberalization of certain industries, and infrastructure improvements, are likely to attract more foreign investment and spur further growth in the country. Inflation has also been addressed with monetary policies such as raising interest rates and tightening monetary policy
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