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The East African : Mar 23rd 2015
60 MARCH 21-27,2015 BUSINESS, MARKETS AND FINANCIAL ANALYSIS THE MARKET WHISPERER EQUITY MARKETS (WEEKLY CHANGE IN BENCHMARK INDEX) NSE 20 Share Index Kenya 5,347.54 -0.48% (CUMULATIVE MOVEMENT) DSE All Share Index Tanzania 2,605.04 -2.09% USE All Share Index Uganda 2,095.00 4.23% RSE All Share Index Rwanda 137.33 0.00% JSE All Share Index South Africa 52,270.66 -1.76% NGSE All Share Index 30,918.19 Nigeria -0.42% the number of dollar millionaires in East Africa, a new wealth report by property firm Knight Frank shows. Kenya is projected to continue having the largest population of dollar millionaires in the region, with investments in real estate a key contributor to the wealth. According to the Wealth Report 2015, the number of high net worth individuals in Kenya is set to increase by 74 per cent from 8,764 in 2014 to at least 15,249 in 2024. The Wealth Report, pub- lished annually by Knight Frank, says that the number of Africa’s super-rich — those with at least $30 million in assets — expanded to 1,932 in 2014 and is set to reach 3,071 over a decade. Tanzania is among Afri- can states on the global list of countries predicted to see their dollar millionaires double from 78 in 2014 to 156 by 2024. According to Ben Wood- The region’s millionaires have been investing in real estate. Picture: File hams, Knight Frank Kenya managing director, Kenya’s regional hub status explains the high concentration of the wealthy in Nairobi. Kenya is the largest econ- omy in East Africa and the number of ultra-high net worth individuals is set to grow by 82 per cent over the next decade to 209 in 2024. The country’s high net worth individuals reached 115 in 2014. Among them, 32 individuals are worth more than $100 million. “Kenya’s ultra-wealthy have been investing in overseas property in the past and have now started focusing inwards, raising their stakes in the local property market. Real estate is the world’s primary investment of choice for the wealthy and Kenya is certainly no exception,” Mr Woodhams said. From the report, wealthy Kenyans are investing an estimated 30 per cent of their wealth outside the country, with Britain being their preferred destination, while Indian investors were identified as having become Tanzania dolla≥ millionai≥es’ figu≥es swelling fast T anzania is set to witness the fastest increase in “It is becoming increasingly obvious that these high net worth individuals are looking beyond just banking and the overall management of their wealth is critical.” the main investors in Kenya’s real estate residential market. The Wealth Report shows dollar millionaires put nearly a third or 31 per cent of their investment portfolio in property. Uganda’s high net worth individuals are expected to increase to 35 by 2024, up from 21 last year. Uganda’s dollar millionaires population was 1,556 in 2014 and is set to increase to 2,523 by 2024. CfC Stanbic Bank head of wealth and investment Anjali Harkoo said that they have witnessed an increase in the number of ultra-high net worth individuals on their books. B≥itam’s expansion st≥ategy finally paying o≠ BRITISH AMERICAN Investment Company (Britam) plans to consolidate its presence in existing markets before extending its footprint to new frontiers. Britam’s subsidiaries in South Su- dan, Rwanda and Uganda contributed eight per cent to group revenue last year. New acquisitions in Tanzania, Malawi and Mozambique are also expected to reduce the reliance on Kenya for business. “We are now a pan-African operation. Right now, the focus is on con- solidating what we have. We need to consolidate before expanding again, but certainly we must continue expanding because if you don’t expand and grow you die,” Stephen Wandera, the group’s insurance director, told The EastAfrican. Britam, which is listed on the Nairobi Securities Exchange and currently controls operations in six countries outside Kenya, entered Malawi, Tanzania and Mozambique through the $15.4 million acquisition of a 99 per cent stake in Real Insurance Company mid last year. “We want to take advantage of the changing demographics and the increasing population in East Africa but Kenya still remains our area of focus,” said Benson Wairegi, group managing director. Despite being engaged in an on- going court dispute with one of its partners — Acorn — and some of its top managers over a $439.6 million property development deal, the company still sees real estate as a promising revenue stream. The diversified financial serv- ices group reported a jump in pretax profit to $41 million for the 12 months to December 31, 2014, up 19 per cent from $34.29 million in the previous year. Gross earned premiums and fund management fees went up 56 per cent to $162 million from $103.96 million. Insurance business contributed 95 per cent of the group’s total revenue, with Kenya generating $136.26 million. Published at Nation Centre, Kimathi Street, and Printed at Mombasa Road, Nairobi by Nation Media Group, Box 49010, GPO Nairobi, 00100. Registered at the GPO as a newspaper. Nairobi Office, Tel: 3288000, 211448, 337710, Fax 214531, 213936. Dar es Salaam Office. Tel: 2119657/8. Kampala Office, Tel: 232771, 232772. Fax 232781 Download free QR Readers from the web and scan this QR (Quick Response) code with your smart phone for pictures, videos and more stories Cash-cow stocks in East Af≥ica DIVIDEND STOCKS have become the choice of many investors seeking reasonable returns to improve their livelihoods and to earn a decent living during retirement. High dividend-paying stocks mostly include companies that have strong cashflow positions, low capital expenditure, low debt portfolio and have matured to a point where they don’t reinvest more resources into growing the value of the underlying business. While a number of compa- nies at the Nairobi Securities Exchange pay dividends to their shareholders, the cash-cow stocks include cigarette manufacturer British American Tobacco, which is committed to paying out its entire earnings to shareholders. This has seen the demand for its stock at the Nairobi bourse hit the roof. Other lucrative stocks in terms of dividend payout are East African Breweries Ltd (EABL), Bamburi Cement and BAT Uganda.
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