In this episode, the Hisa team discusses developments in local markets last week, including the performance of banking sector stocks, and the Crown Paints rights issue. They also talk about commodity prices, and returns in other markets in Africa and the world.
- Banks had good results for Q1 and an optimistic outlook going forward, buffered by low NPL deterioration where banks were adequately provisioned. Good results going forward assuming no uptick of deterioration of loans could be the market catalyst the NSE needs.
- I&M completed the 90% acquisition of Uganda’s Orient Bank LTD and today closes the books for the bonus of a ratio of 1:1. The transaction will lower EPS, and increase equity. Its share price is expected to fall after the bonus issue.
- Regionally, returns from African markets like Zimbabwe are bringing YTD returns of 81% in local currency and 75% in USD.
- In the US markets, S&Ps are trading at a PE of up to 35X with an average of 16 to 19 times, with investors taking into account possible underperformance given stocks are heavily valued and future growth already accounted for.