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East African markets firm despite Sudan uncertainties

Markets in East Africa appear to have shrugged off international concerns about north-south tension in Sudan following a ‘Yes’ vote for secession by those in the south of the country.

Imara, the Pan-African investment banking and asset management group, tells international investors in its latest East African equities fund report that sentiment across the region remains ‘bullish’ at the start of the year.

Indices in Uganda, neighbouring South Sudan, were up 1.9% by the end of January. Those in Kenya were largely unchanged.

Preliminary results in the referendum in South Sudan show overwhelming support for secession, setting the scene for a declaration of independence in July. Challenges include a demarcation of the boundary with the north of the huge country and finalisation of a deal on oil resources with the government in Khartoum.

Paul Sigsworth, a fund manager at Imara, draws attention to continuing positives in the region, especially in Uganda where the running dispute between government and Tullow Oil has been resolved. The listing of the company on the Uganda Securities Exchange is now expected sometime this year.

He adds: “This is expected to put oil production on track by 2012. On top of that, the regional governments, including DR Congo, have agreed to construct a refinery in the south of Uganda while pipelines will be constructed to link major cities.”

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