Stock markets can be quite predictable, but every so often they tend to ignore market sentiment. Nevertheless, looking back at some of the most popular stocks of 2015 may give you a guide on how to further invest this year.
The most obvious way to determine how good a particular stock is, is by looking at the yield gained in the previous year. However, to truly identify the best stocks, you also need to look at the potential in the coming months. As we very well know, a good stock is that which keeps giving for a longer period.
This had not been a fast growing company by any means, in fact, the company had experienced slowed growth over the past few years. After a deal with ICBC (Industrial and Commercial Bank of China) in 2015, however, investors quickly snatched up the company’s shares. Standard Chartered has now turned its focus onto Africa, investing heavily and promising even better returns this year.
This East African telecom giant has got a true foothold in the market, providing voice call services, data and sms services. The most important department, however, is M-Pesa, a mobile banking service that has placed even the big banks on the ropes.
More and more people are using M-Pesa and M-Shwari, which led to the 25% profit rise in the first half of 2015 from Ksh. 14.7 billion to Ksh. 18.1 billion. Share prices as well had a slight growth, hampered only by foreign exchange activities given the depreciation of the Kenyan Shilling.
We have seen before just how much the insurance industry is yet to penetrate the African market; the problem is compounded even more for reinsurance companies. On the other hand, these companies enjoy the benefit of promptly paid premiums without having to pay claimants all the time. With proper management, therefore, this can be a very profitable business.
Continental Re has done just that; it is one of the biggest reinsurance companies in Africa, with offices in over 5 countries and reinsuring over 200 companies. Revenue in 2015 rose by 25% earning shareholders a 11.3% dividend yield.
What makes popular stocks
Most important are market conditions as these can make or break a company. Take, for example, the depreciation of the SA Rand or the Kenyan Shilling. These made exporters from the countries enjoy a bigger profit margin without any deliberate effort, and the opposite is true. Other factors one should consider are management, the section of the industry and market sentiment.