Why This Matters
When you buy a government bond, you are a lender. When you buy a stock (ação), you become an owner. You literally own a fraction of one of Angola’s companies — its assets, its profits, and its future growth. Equities have the potential to deliver returns far exceeding bonds, but they also carry greater risk. Understanding how stocks work on BODIVA is essential for building a growth-oriented portfolio.
What Is a Stock?
A stock, or share (ação), represents a unit of ownership in a company. When BAI conducted its Initial Public Offering (IPO) in 2022, it divided its ownership into millions of individual shares and sold a portion to the public. Each share gives you:
Ownership rights — You own a proportional piece of BAI’s assets (buildings, loan portfolios, cash reserves).
Profit sharing — When BAI earns profits, the board may declare a dividend (dividendo) — a cash payment to shareholders. If BAI pays a Kz 62.50 dividend per share and you own 1,000 shares, you receive Kz 62,500.
Voting rights — Shareholders can vote on major company decisions at the annual general meeting (assembleia geral). More shares = more votes.
Capital appreciation — If BAI performs well and investors become more optimistic, the share price rises. You bought at Kz 100,500 and the price rises to Kz 1,500? Your 1,000 shares gained Kz 250,000 in value.
Angola’s Listed Companies
BODIVA currently lists five companies, all of which went through the ProPriv privatization program or self-listed:
| Company | Sector | IPO Year | Approximate Price | Market Cap |
|---|---|---|---|---|
| BAI | Banking | 2022 | Kz 100,500 | ~Kz 420B |
| BFA | Banking | 2024 | Kz 2,800 | ~Kz 350B |
| BCGA | Banking | 2024 | Kz 900 | ~Kz 180B |
| ENSA | Insurance | 2024 | Kz 650 | ~Kz 85B |
| BODIVA | Exchange | 2024 | Kz 1,100 | ~Kz 65B |
The market is concentrated in financial services. As Angola’s privatization program (ProPriv) continues, additional companies from sectors like telecommunications, mining, and logistics are expected to list, providing greater diversification.
How Stock Prices Are Determined
On BODIVA, stock prices are set by supply and demand through an order-matching system during trading hours (09:30-13:00 WAT):
Buyers place bid orders: “I want to buy 500 BAI shares at Kz 100,500 or less.” Sellers place ask orders: “I want to sell 500 BAI shares at Kz 1,260 or more.”
When a buyer’s maximum price meets or exceeds a seller’s minimum price, a trade executes. The last executed trade price is the current market price.
What moves prices up: More buyers than sellers, positive company earnings, positive economic news, BNA rate cuts, successful expansion.
What moves prices down: More sellers than buyers, disappointing earnings, negative economic news, BNA rate hikes, management problems.
Understanding Stock Returns
Stocks generate returns through two channels:
Dividends (Dividendos)
Cash distributions from company profits. Not all companies pay dividends — some reinvest all profits for growth. Dividend yield = Annual dividend per share ÷ Current share price.
If BAI pays Kz 4,000 per share annually and trades at Kz 100,500: Dividend yield = 4,000 / 100,500 = 4.0%.
Capital Gains (Mais-valias)
Price appreciation. If you buy BAI at Kz 100,500 and sell at Kz 1,500: Capital gain per share = Kz 250, or 20%.
Total return = Dividend yield + Capital gain. A stock paying 10% dividend with 15% price appreciation delivers 25% total return.
How to Evaluate a Stock
Even at the beginner level, you should consider these basic metrics:
Price-to-Earnings Ratio (P/E): Share price divided by earnings per share. If BAI earns Kz 250 per share and trades at Kz 100,500, the P/E is 5x. Lower P/E = potentially cheaper; higher P/E = investors expect more growth. Angolan stocks generally trade at P/E ratios of 3-8x, well below global averages.
Dividend Yield: Annual dividend divided by share price. Higher is better for income seekers, but very high yields may signal a company in trouble (price has fallen, making the yield look high).
Book Value: The company’s net assets (assets minus liabilities) divided by shares outstanding. If the share price is below book value, you are buying assets for less than they are worth on paper.
Profit Growth: Is the company growing its earnings year over year? A company with consistent 15-20% annual profit growth is far more attractive than one with flat or declining earnings.
Worked Example: Analyzing a BAI Purchase
Paulo is considering buying BAI shares. Here is his analysis:
Current data:
- Share price: Kz 100,500
- Earnings per share (EPS): Kz 280
- Annual dividend: Kz 125 per share
- Book value per share: Kz 1,400
- Profit growth (YoY): 22%
Calculations:
- P/E ratio: 1,250 / 280 = 4.5x (cheap by global standards)
- Dividend yield: 125 / 1,250 = 10% (strong income)
- Price-to-book: 1,250 / 1,400 = 0.89x (trading below book value)
Paulo’s assessment: BAI trades at a P/E of 4.5x with 22% profit growth, a 10% dividend yield, and below book value. By standard valuation metrics, this appears attractively priced. However, the low valuation partly reflects Angola country risk and the nascent state of the equity market.
Paulo buys 800 shares: Total cost = 800 × Kz 100,500 = Kz 1,000,000 + ~Kz 3,500 in fees.
Expected annual income: 800 × Kz 125 = Kz 100,000 in dividends (10% yield), minus 10% IAC = Kz 90,000 net. Plus potential capital appreciation if the market revalues BAI toward regional banking multiples.
Key Takeaways
- Stocks represent ownership in a company — you share in profits, growth, and risk
- BODIVA lists 5 companies, concentrated in financials, with more expected via ProPriv
- Returns come from dividends (income) and capital gains (price appreciation)
- Stock prices are driven by supply and demand, reflecting company performance and market sentiment
- Key metrics: P/E ratio, dividend yield, book value, and profit growth
- Angolan stocks trade at low valuations by global standards — reflecting both opportunity and risk
Common Mistakes
Buying on tips — Never buy a stock because someone on WhatsApp said it would go up. Do your own analysis or accept you are gambling, not investing.
Panic selling on price drops — Stock prices fluctuate daily. A 5% drop is normal market noise, not a signal to sell. Focus on the company’s fundamentals, not daily price movements.
Ignoring diversification — Putting all your equity allocation into one company is risky. Spread across multiple stocks if possible, and always maintain bonds as your portfolio anchor.
What’s Next
You now understand both bonds and stocks. But how do you compare returns across different investments? The next lesson covers yields — current yield, yield-to-maturity, dividend yield, and total return — the universal language of investment performance.
Next Lesson: Understanding Yields — The Universal Measure of Return
Browse live prices on the BODIVA Equities Dashboard. Read the BAI company profile for detailed analysis.