Question: which country’s stock is up 787 per cent in dollar terms since 2002?
Answer: Kenya.
The Guardian (via Crossing Wall Street) reports that Kenya has gone share crazy. At 10.30am every week day morning, in an auditorium on the first floor of a Nairobi office block, businessmen jostle with taxi drivers and farmers for seats. All eyes are on a white screen at the front where a spreadsheet appears – a live feed from the Nairobi Stock Exchange next door. Geoffrey Wachira, a 27-year-old moneychanger, smiles. “My shares are up again,” he says. Demand for seats is so great that a new audience is allowed in every hour.
Stories of overnight wealth creation have created a huge frenzy for shares from people who have never invested in the stock market before. When KenGen, the state’s biggest electricity company, listed its shares last year, there were queues at brokerages all over the country. Local media reported how small-scale farmers were selling their cattle to buy the shares. Banks suddenly offered “share loans” to people who had been considered unworthy of credit.
Jimnah Mbaru, the NSE chairman, said: “We have several stock market billionaires [1bn shillings equals £7.2m]. We’ve stopped counting the multimillionaires.”
The buzz about the stock market is seen online, where numerous blogs are now devoted to the bull market, adds the Guardian.
At the Kenya Capital Investment Group blog, ‘an investment club of UK Kenyans who invest in the Nairobi Stock Exchange’, and over at the Investing in Africa blog investors swap stories on possible forthcoming IPOs. But the market’s rapid rise is obviously giving some pause for thought.
“I wonder whether its still good to do an ipo right now. The market is behaving in a confused way!” says one. While another, picks up the Guardian story and asks, “do stories such as these portend the end of the Kenyan bull market?”
And the Kenyans’ enthusiasm for listings is spreading beyond their borders. Mr WaveTheory in December commented that the IPO of Stanbic Uganda, the largest bank in Uganda, reportedly attracted large amounts of foreign money from investors in Kenya.
The Ugandan stock exchange has nine stocks listed, including Stanbic Uganda, he adds. “You can see it is not particularly active or liquid. In fact, the stock exchange trades 2 times each week from 10am – 12pm on Tuesdays and Thursdays “