Tom Minney examines the regional rankings in our annual survey of Africa’s Top 250 companies
North African companies score the biggest gains
To view our ranking of the top 20 companies in North Africa, click here.
In terms of increased share of the total, the three North African markets score the biggest gains, increasing the total number of companies in the ranking to 83, up from 70 in 2019. Tunisia has seven more companies bringing its total to 12, after falling from seven in 2018 to five last year. Morocco has added four to reach 30 companies on the list and Egypt has added two to reach 41.
In terms of companies on the top 250 list, Egypt and Morocco are second and third ranked after South Africa, as last year. To view our full ranking of Africa’s Top 250 Companies, click here.
Although the total market capitalisation of all the region’s companies is down from last year’s $98bn to $78.7bn this year, the share of the total is up marginally to 13.2%.
The biggest companies in the region are listed on the Bourse de Casablanca, including Maroc Telecom, up from #10 last year to #8 despite a 16% fall in market capitalisation to $11.1bn, and Attijariwafa Bank, up from #17 to #15 this year despite market capitalisation down 24% to $7bn.
The Egyptian Exchange is home to Egypt’s Commercial International Bank whose $6.1bn market capitalisation is down only 0.7% and enough to move it up the ranking from last year’s #27 to #18, and Casablanca hosts Morocco’s Banque Centrale Populaire with market capitalisation of $4.1bn and ranked at #28.
Casablanca’s MASI Free Float All Shares Index is down 17.4% in Moroccan dirhams, and the Egyptian Exchange’s EGX30 index has crashed a massive 33%, although the impact is reduced because the Egyptian pound, up nearly 10%, is one of the few currencies to have climbed in value against the US dollar over the last 12 months. Tunisia’s dinar is the other to have gained against the greenback, up 4.5%.
Few commentators are ready to outline growth prospects in the region, which has been massively impacted by the Covid-19 pandemic. At the time of compiling the survey, Egypt has the sad distinction of having the highest number of cases in Africa, followed by South Africa then Morocco, while fourth-placed Algeria had the most recorded deaths, followed by Egypt.
Morocco’s High Commission for Planning reports that 57% of companies have temporarily or permanently closed operations. More than 135,000 firms had temporarily suspended activities and 6,300 were already permanently closed by late April. Hardest hit were businesses in accommodation and restaurants, followed by the textile, leather, metal and mechanical industries.
In January, Egypt was forecast to strengthen growth in 2020 and 2021, supported by economic reforms that started in 2016. Although non-oil private sector activity was plummeting, coordinated stimulus means the country should still score growth this year and next. Tourism is an important contributor to Tunisia’s economy and a major casualty of the pandemic.
West Africa: Bears savage share prices across region
The ranking was swelled by two more Nigerian companies and one more from the Bourse Régionale des Valeurs Mobilières (BRVM), which links eight West African markets. This brings the regional total to 27 with combined market capitalisation of $33.1bn, down from $36.5bn a year ago.
To view our ranking of the top 20 companies in West Africa, click here.
The dynamic Nigerian market and ongoing diversification in the economy away from oil are reflected in a good number of new entrants. Telco MTN Nigeria soared into the Top 250 ranking at #23 after its $5.1bn NSE listing by introduction in May 2019 and Airtel Africa joined the list at #37. West Africa’s second biggest cement firm, Bua Cement, joined the ranking at #34 with marketcap of $3.1bn after a N1.2 trillion ($3.3bn) listing on the Nigerian bourse in January 2020. Diversified agricultural and foods business Flour Mills of Nigeria joined the ranking at #222.
Bears were savaging share prices across West Africa, with the Nigerian Stock Exchange Main Board Index down 27% in naira and the BRVM composite plummeting 23% for local investors over the year. Ghana Stock Exchange’s Composite Index also pulled back, down by 12%. This is the second year of declining share prices.
Despite the diversification successes, this year’s rock-bottom oil prices will cause havoc, particularly to Nigeria’s economy. In late April, the Nigerian National Petroleum Corporation warned it may shut down oil production if low prices persist. Kennie Obateru, NNPC Group general manager, public affairs, said: “We can’t keep producing if there is no market to sell to. It is a global thing.” The IMF forecasts that Nigeria’s GDP will shrink by 3.4% in 2020.
As we went to press at end of April Ghana was moving to end its three-week partial lockdown after the second highest number of tests for coronavirus in Africa (after South Africa) and this is expected to help with the economic recovery. Côte d’Ivoire could get back to growth relatively soon. Senegal is likely to contract this year and then get back on track reaping the benefits of investing in its infrastructure and growing agriculture with some hydrocarbon potential after 2022.
East Africa’s share of top companies falls back
Some of Africa’s most attractive investment destinations are found in the East. But this did not stop the region’s share of the Top 250 ranking falling from 21 companies totalling $26.3bn (4% of total market cap) last year to 17 entries totalling $20.2bn (3.4% of the total) this year.
To view our ranking of the top 20 companies in East Africa, click here.
Kenya lost three entries to list 11 companies and their combined market capitalisation was down from $21bn to $16bn. This is despite the ongoing dominance of telco Safaricom, with $10bn of market value, climbing to #10 this year from #14 in last year’s ranking. Tanzania also lost an entry and was down to four, with Uganda steady at two entries.
Kenya’s more liquid currency fell back as global investors raced for safety but Tanzania and Uganda saw little overall change over 12 months. The Nairobi Stock Exchange All Share Index also fell by over 12%. This was despite relatively good prospects for leading companies, including the many banks where restrictions on interest rates have been lifted, meaning more lending and more profits, which initially sparked rising share prices.
In April, credit rating agency Agusto said it expects Kenya’s growth to slow to 3.5% in 2020, one of Africa’s leaders, down from an average of 5.7% a year for the past decade. The coronavirus crisis will damage tourism and farming – including a 50% cut to flower exports to Europe. Growing waves of locust swarms are expected to have terrible impact on food production and there are budget deficits and debt distress.
However, Kenya’s companies are resilient and manufacturing millions of masks to protect against coronavirus – the government made wearing of them compulsory in public on April 15 – as well as protective equipment. Meanwhile, Kenyatta University students lived up to the country’s reputation for innovation by unveiling a prototype ventilator machine that they said could be manufactured for $5,000.
Mushrooming digital solutions could transform farming and food supply including online marketplaces such as Twiga Foods and M-Farm, cutting out some brokers and middlemen who have been seen as problematic.
Telco Vodacom Tanzania has another year of climbing the rankings (up from #135 to #98) and Tanzania Cigarette Co (up from #146 to #105) is among the rising stars while many of the other regional companies are banks including the $1.2bn Kenya-based giant bank Equity Group Holdings (#82) which has 14m customers and subsidiaries in Uganda, Tanzania, Rwanda, South Sudan and DRC.
Another giant economy, Ethiopia, does not yet have a stock exchange or companies listed on other exchanges, and is a sad omission from the Top 250 African Companies.
Southern Africa: South Africa still top, but listings fall again
South Africa dominates the market capitalisation of our rankings, partly because it was for many years Africa’s top economy and partly because many leading South African firms have spread worldwide and grown their market capitalisations through overseas primary listings.
But South Africa’s share of the Top 250 Company ranking continues to slip back because other African markets have been growing more strongly – at least before the crisis hit. South Africa now has 100 companies on the list, down from 109 in 2019.
To view our ranking of the top 20 companies in Southern Africa, click here.
As a region, the total share of market capitalisation is only down marginally, from 79% of the total to 77.9% but the number of companies on the listing is down from 135 to 123.
The region has been facing its worst drought in decades, possibly a century. Late and diminished rainfall and long-term increases in temperatures have been affecting rainfall since October 2018. Grain production was down 30% across the region and 53% in Zimbabwe and livestock numbers have fallen. Food insecurity affected 45m people at the start of 2020 and several countries have declared emergencies. Drought has hammered economic growth, including in countries such as Zambia which were already hurting with two years of sliding copper prices.
South Africa is also struggling to resuscitate an economy damaged by years of mismanagement. The IMF now forecasts a 5.8% GDP contraction this year, as a result of the pandemic, while Moody’s has dropped the country’s credit rating to sub-investment grade (Ba1 with negative outlook) and predicts a contraction of 6.5%. On the bright side, analysts forecast recovery in 2021.
The Stock Exchange of Mauritius has the biggest increase in listings, with five additional members of the top club. It lists the shares of Cairo-based Afreximbank, a new entrant on the list at #57, with market capitalisation of $2.0bn. The bank had planned to list in London and raise $250m to finance expanding African trade under AfCFTA but postponed this due to adverse market conditions last October.
Other additions are Phoenix Beverages, investment group Ciel, and property investors Ascencia (part of Rogers Group) and Lighthouse Capital (renamed from Greenbay Properties in December 2018).
Malawi’s two new entrants are its leading bank, National Bank of Malawi, (at #177) and Press Corp (#221), which owns 51.5% of Natbank.
Botswana, Zambia and Zimbabwe have all lost companies on the listing. Zimbabwe is down from nine companies on the list in 2019 to two this year. Brewer Cervejas de Moçambique, previously the sole inclusion on the list from Bolsa de Valores de Moçambique (BVM), has dropped off this year.