Mmegi Online :: Letshego nosedives on stock market
Banners
Banners
Banners
Banners
Last Updated
Friday 22 September 2017, 15:45 pm.
Banners
Letshego nosedives on stock market

* Analyst maintains hold position
By BRIAN BENZA
Staff Writer
(GMT +2)
Mmegi Online :: Letshego nosedives on stock market








Microlender Letshego this week continued with its losing streak on the Botswana Stock Exchange (BSE) as selling pressure mounts on the counter against the background of investors' apprehension over the company's future cash flows.

The investors' panic follows reports that government would cease facilitating deduction of microlenders' loan repayments from source starting December 1 this year. Botswana operations contribute over 60 percent to the group's profitability.

This week, Letshego dropped to a year low of 139thebe per share, meaning investors have lost a quarter of the stock value since the beginning of September when the counter was trading at 175thebe per share.

With much of its business coming from loan arrangements with civil servants, Letshego has already advised its shareholders about the government's decision to stop the 10-year old arrangement that has been its cash cow.

The company now has less than three months to craft new ways of collecting repayments on loans, some of which could have tenures of as long as five years.  According to industry sources, Letshego - which now offers macro loans of up to P200,000 - has been collecting at least P66 million

Banners

per month from government employees in loan repayments.

The revocation is set to dent its P2.3 billion-loan book. "Letshego Holdings Limited was informed on 31 August 2011 of the intention of the Government of the Republic of Botswana to cease facilitating the deduction of microlenders loan repayments from source effective 1 December 2011," it said in a cautionary statement.

"Should this revocation come into effect, Letshego Botswana will use alternative methods for the collection of contractual monthly loan repayments. The Board of Directors is engaging with the relevant authorities to obtain more clarity and a resolution to this matter. Shareholders are therefore advised to exercise caution when dealing in the securities of the company."

Despite the anxiety surrounding the controversial government decision, stockbrokers are still optimistic that the company will find a way around the hurdle and that the stock will rebound again.

"We are experiencing selling pressure on the stock from some institutional investors. We however assign a hold recommendation on the stock pending the outcome of negotiations that the management of the company is currently undertaking," read a market report from Motswedi Securities.

Banners
Banners
Banners


Business
Fri 23 Sep 2011
Fri 23 Sep 2011
Fri 23 Sep 2011
Fri 23 Sep 2011
Fri 23 Sep 2011
Fri 23 Sep 2011
Banners
Banners
Exchange Rates
FOREIGN EXCHANGE: Friday, 22 Sep 2017
FOREIGN / PULA
PULA / FOREIGN
1 USD = Pula   10.1833
1 GBP = Pula   13.8313
1 EUR = Pula   12.1803
1 YEN = Pula   0.0909
1 ZAR = Pula   0.7670
1 Pula = USD   0.0982
1 Pula = GBP   0.0723
1 Pula = EUR   0.0821
1 Pula = YEN   11
1 Pula = ZAR   1.3037
have a story? Send us a Tip
Banners
  • Previous
    The Emoji Movie
    Next
    Masa Centre
    ::: Friday 22 Sep - Thursday 28 Sep :::
    The Emoji Movie
    American Assassin
    IT
    The Dark Tower
  • Previous
    The Emoji Movie
    Next
    Riverwalk
    ::: Friday 22 Sep - Thursday 28 Sep :::
    The Emoji Movie
    American Assassin
    Home Again
  • Previous
    The Emoji Movie
    Next
    Gamecity
    ::: Friday 22 Sep - Thursday 28 Sep :::
    The Emoji Movie
    Home Again
    American Assassin
    The Dark Tower
    Girls Trip
Selefu
UDC
Banners
Banners