The report shows that the big-cap companies (10 in total) have a market capitalisation of $40.3 billion with a price-to-earnings ratio (P/E) of 16.3 and return on equity (ROE) of 55.8%. The mid-cap companies (20 in total) have a market capitalisation of $11.4 billion with a P/E of 8.0 and an ROE of 26.0%. The average market capitalisation for the Top 30 companies is $51.7 billion, with a P/E of 14.4 and an ROE of 49.2%.
Dangote Cement, MTN Nigeria, and BUA Cement make up 51% of the Top 30 companies in West Africa. The 9-month reported earnings for the region in 2022 showed a 3% increase. The report also shows that dual-listed stocks trade at discounts to their home markets, with discounts of 47% for Seplat Petroleum and 62% for Airtel Africa. Big-cap companies are more profitable, with ROEs of 56% compared to 26% for mid-cap companies. In addition, their stock market returns are superior to those of mid-cap companies.
Nigeria, the regional heavyweight, has 21 stocks listed in the report, followed by the BRVM with 8 stocks, and Ghana with 1 stock. The report shows that banks make up 13 of the stocks listed, manufacturing makes up 8, telecoms make up 5, and the remaining 4 stocks come from other industries.
For investors looking to invest in the West African market, the report suggests that big-cap companies may be a more attractive option due to their higher profitability and better stock market returns compared to mid-cap companies. Additionally, with the growing economy in the region, it is possible that the overall performance of the market and its companies will continue to improve in the future.