According to an analysis conducted by Business Insider, the Lusaka Stock Exchange has been voted the best performing stock exchange of 2021. This comes following a gain of 93% in the total value of stocks on the exchange. The LSE’s strong performance eclipsed that of fellow stock exchanges with Ghana (38%) and Malawi (32%) registering as distant second and third. The best performing stocks of the year according to data from Africa Financials were Zanaco, an increase in share value of 406.38% increase in value making it the best performing banking stock in the whole of Africa by value. Lafarge was the best performing stock in Zambia with a 500% increase in share value.
Who were the Biggest Gainers and Losers
The biggest earners in the market this year were what we could regard as the blue chip, well established Zambian corporations. Lafarge Holdings led the pack with earnings exceeeding 569% growth in share value. This follows a blockbuster year which saw significant partnerships being formed (Afridelivery) and an acquisition by Chinese firm Hauxin, which likely boosted the share price. Following directly behind were Zanaco (+406.38%) and Zambia Sugar (+468%), both companies welcomed record profit margins in 2021 which saw investor appetite increase. Zanaco’s new CEO is already performing beyond expectation with the bank hitting record profit margins, and eclipsing more than 2.5 million active accounts this year. Closing up the top 5 were CEC (+140%) and Real Estate Investments Zambia (+220%). Following the change in government CEC has benefited from a normalisation of business conditions which has benefited the companies share price.
The biggest losers in the market this year were, surprisingly, Airtel Networks, who despite building an extremely profitable mobile money business, are still failing to keep up with MTNs stronger mobile money base. Airtel stock fell by more than -38% but this is unlikely to be an indicator of any significant problems with the company but more investor response to a lack of market participation in comparison with MTN who have gained notable partnerships from Hungry Lion and the Lusaka Stock Exchange, keeping investors excited. British American Tobacco recorded a loss in share value of nearly 19.44% which is likely attributed to anti tobacco legislation which has been proposed to diversify tobacco farmers due to international pressures. Zaffico and Madison Insurance saw losses of -8% and -14.2% over the last year and First Quantum Mineral closes the list with a performance of -5.14% (likely in reaction to volatility in the copper market over 2020 which affected earnings.
Conclusion
This has been a formidable year for the Lusaka Stock Exchange, beating Ghana, South Africa and Kenya to be the best performing. Over the last 5 years there has been significant pressure from the public for the exchange to modernise in order to attract more funding to the exchange. Recently the release of the Lusaka Stock Exchange app, which has received more than 10,000 downloads, shows the regulator finally responding to that demand with significant results. We hope with more investor participation, we can build one of the more formidable exchanges in Africa.
