It’s been a tough year for Africa investors. Most sub-Saharan indexes are in the red and some have dramatically underperformed the S&P500. But a handful of frontier listings managed to buck the trend.
Here’s a list of Africa’s top-performing stocks year-to-date. (Note that returns are dollar-adjusted, and all companies average weekly trading volumes in excess of $10,000.)
10. ABC Holdings (ABCH:BG) — 61.5% YTD Return
The Botswana Stock Exchange’s top performer thus far is regional bank, ABC Holdings. ABC grew after-tax earnings by 33% during the first half of the year thanks to a stabilizing economic environment in its largest market — Zimbabwe.
9. First Banking Corp Holdings (FBCH:ZH) — 62.9% YTD Return
This Zimbabwean financial services firm also owns a large share of Turnall, a local manufacturer of construction materials. After more than doubling its first-half earnings, management rewarded shareholders with a hefty mid-year dividend payment.
8. Produce Buying Company (PBC:GN) — 68.0% YTD Return
Ghana’s largest dealer of cocoa and shea-nuts nearly doubled its profits in the first six months of its 2011 fiscal year. The company may have benefited from political instability in neighboring Côte d’Ivoire, a major cocoa-producer.
7. Total Petroleum Ghana (TOTAL:GN) — 80.5% YTD Return
The subsidiary of the French oil giant operates more than 200 service stations throughout Ghana. Half-year results showed a 45% increase in profits, but third quarter results indicate much less scintillating growth. The share price has since been on a downward trajectory.
6. ZB Financial Holdings (ZBFH:ZH) — 100.0% YTD Return
A diversified Zimbabwean financial services company, ZB Financial derives most of its income from commercial lending. It also operates a sizable insurance business. Investors were cheered by a dramatic increase in profitability during the first half of the company’s fiscal year.
5. Dar es Salaam Community Bank (DCB:TZ) — 101.8% YTD Return
A Tanzanian bank focused on lending to small and medium enterprises, DCB management boosted its 2010 dividend by 71%. Earnings increased 23% in the first nine months of 2011, propelled by a big gain in net interest income.
4. Société des Caoutchoucs de Grand-Béréby (SOGC:BC) — 104.0% YTD Return
The Côte d’Ivoire-based SOGB produces two very hot commodities: rubber and palm oil. Accelerating vehicle sales in China and India have driven up rubber prices, while palm oil prices are on the rise due to its increased usage as a bio-fuel.
3. AEL Zambia (AELZ:ZL) — 109.4% YTD Return
The company supplies explosives to the Zambian mining and construction industry. Its 2011 financial results have been nothing to write home about. Investors may be speculating on long-term growth in the local mining sector.
2. Truworths Zimbabwe (TRUW:ZH) — 137.1% YTD Return
A leading Zimbabwean clothing retailer, Truworths operates 59 stores and also manufactures apparel for export. The company benefited immensely from dollarization with 2011 fiscal year operating profit soaring 204%.
1. Fidelity Life Assurance Company (FLIFE:ZH) — 536.4% YTD Return
Africa’s top performing stock thus far in 2011 is Zimbabwe’s oldest insurance company. Fidelity Life made its shareholders extremely happy by growing profits by 431% during its 2011 fiscal year on the back of strong local demand for insurance products and a growing operation in Malawi.
Clearly, the Zimbabwe Stock Exchange was chock full of hidden gems one year ago. Are there more to be unearthed in 2012?
Throughout the month of December, I’ll be scouring African markets in search of bargain stocks. Stay tuned to see what I dig up.
Disclosure: I own shares of Dar es Salaam Community Bank.