• ICT leads with positive gains
• Banking sector downgrades further
The Retail and Wholesale sector retreated the most by combined value on the Botswana Stock Exchange (BSE), working down the performance of the entire weighted value of listed domestic companies to the red zone in the first half of 2017.
The Domestic Company Index (DCI), depreciated by 1.7 percent in comparison to a depreciation of 4.9 percent during the same period in 2016, according to the BSE.
As at June 30 2017, the Retail and Wholesale sector led losses saw a weakening by an aggregate of 2.9 percent. The sector comprises of Choppies Holdings Limited, Furnmart Limited, Sechaba, Sefalana and Olympia.
Market analysts point out that the sector was forced down by the poor performance equities of the embattled Sechaba, Sefalana and Furnmart companies. Stocks on domestic counters depreciated by 25.9 percent, 14.2 percent and 14. 3 percent respectively on a year-to-date basis (YTD). Sechaba came under massive sell down pressures as investors weighted options, soon after they learnt that the brewery will lose Coca Cola bottling rights, which contributed 30 percent to its bottom line. Demand for its stock has been weak, as with Sefalana. Fundamentally, Moemedi Mosele at Motswedi Securities, says there is nothing wrong with Sefalana. The company endured selling pressures after its right issue and has been continuously under pressure thereafter.
“With Furnmart, it is a continuing trend after difficulties in Zambia, profitability has been on a decline, there has been no dividend payout and there is no interest. With Choppies its just optimisms that it will bounce back,” Mosele argues. Choppies advanced 6.7 percent.
Meanwhile, the Information Technology and Telecommunications (ICT) sector led the gainers, with the only listed telecommunication company, Botswana Telecommunications Corporation (BTC), advanced 50 percent to set off a positive ratio, toppling Property and Property Trust index. “Nothing has happened in the property sector. Most of them have been flat,” Mosele indicates.
The telecommunications sector advanced 1.1 percent. BTC has been the hottest stock on the BSE, due to profitability and optimism on the management and growth of the company. Brokers says investors are falling over themselves to grab a piece of the cake. By close of business on Wednesday BTCL was trading at P1.47 and is predicted to leap to P1.50, driven solely by demand.The Property sector, made up of Turnstar, Far Property, Primetime, New African Property, Letlole la Rona and RDC Properties advanced by 0.8 percent. Far Properties set off losses, depreciating 4.7 percent on a YTD, ahead of Turnstar which has been failing to initiate appetite for its stock despite its revamped Game City Mall. New African Property, the biggest property counter has had a good run, advancing 9.2 percent. Primetime, RDC and Letlole advancing 1.9 percent, 1.9 and 5.4 respectively, “Not bad for the industry. Others should pick up,” Mosele argues.
The tourism sector was the third best performer, advancing by 0.2. The sector is made of 3 counters: Cresta, Chobe Holdings and Wilderness Holdings. Cresta rode out an alleged financial impropriety by former management, advancing by a 2.3 percent. Chobe has been on an up and up trajectory appreciating by 9.2 percent. Wilderness gained 1.5 percent.
The Mining and Minerals sector, with its sole counter Minergy gained 0.05 percent after the coal explorer gained 5 percent since listing on the BSE venture capital in April. The Energy sector advanced 0.03 percent to the DCI after Engen the only listed petroleum marketer shrugged off the oil glut and depressed commodity prices, its stock accelerating by 1.1 percent. Securities Service were in the negative, weakening by 0.02 percent. The market leader retreated by 2.0 percent.
The Financial Service Sector was also in the red, slowing down by 0.3 percent, thanks to a weak performance by Letshego Holdings, which retreated by 9.2 percent on a year to date basis. BIHL has advanced 7.4 percent, not enough to offset losses by its associate; Letshego.
The banking sector has also downgraded further, decelerating by 0.7 percent. The sector has grappled with a slowing economy coupled with towering impairments that eat into profit margins. Standard Chartered Bank led losses, slowing by 20 percent while the First National Bank of Botswana retreated by 9.7 percent. “A number of things have been on play at Stanchart, like exposure to the BCL impairments which it is most likely not going to recover,” Mosele posits.
Barclays on the other hand has had a stellar performance. The bank advanced by 17.1 percent. Historically the DCI had been heavily reliant on the banking sector.