ABCH delisting dampens BSE market cap

Isaac Pinielo | Friday May 29, 2015 10:22

ABCH, which is the parent company of BancABC, delisted from the BSE in January this year after being bought by Atlas Mara.

According to leading brokerage firm, Motswedi Securities, the delisting led to the quarterly market capitalisation declining by 2.1 percent to P45.3 billion, relative to the P46.2 billion achieved by the end of the fourth quarter of 2014. However, the brokerage firm indicated that the delisting was almost overshadowed by major gains from some of the heavy counters, as it almost recovered to end the quarter closer to the P46 billion mark.

There were 154.7 million shares worth P557.8 million that traded during the first quarter, about five percent lower than the 162 million, which were worth P576.7 million traded during fourth quarter of 2014.

“Despite the relative thin trades as compared to the prior quarter, the first quarter was quite captivating with ABCH exiting the market,” stated Motswedi Securities. The domestic companies index (DCI) was generally on the green despite the negative monthly return in January due to profit taking. The index pocketed an average return of 0.67 percent with the highest return realised in February.

This was vaguely higher than the average return posted during the prior quarter.

On a quarter-on-quarter, the DCI advanced by two percent. On the other hand, the foreign companies index (FCI) continued to be on the red, losing 41 basis points. Most counters ended the quarter in green territory with about four counters from the foreign board.

Letshego continued to be the most liquid counter in the market having traded the highest volumes for a fifth consecutive quarter. The micro lender topped the trades contributing 49 percent while First National Bank of Botswana (FNBB) and Choppies Enterprises exchanged 18.1 percent and 15.8 percent in that respective order.

Discovery Metals (DML) was the largest gainer quarter-on-quarter as it recovered, advancing by almost 60 percent. DML came from a 12 month low to rebound to 22 thebe, as it surged by 57 percent being the largest gainer during the quarter. The stock has been on the losing end in the greater part of last year and the current rebound is expected as the stock is coming off a lower base.

Meanwhile, the major losers were Botswana Diamonds (BOD), G4S Botswana, Letshego, A-Cap Resources and Choppies Enterprises mainly on profit taking. On the main board, Sefalana led the rally (up by 19 percent) following the release of acceptable results, which were mainly buoyed by its expansion into the Namibian market. Imara also edged up after the financial services provider disposed of its stockbroking business in South Africa earlier in the year. Other significant gainers were Barclays Bank of Botswana as investors responded to their full-year results.

The three Exchange Traded Funds (ETFs), NewGold, BettaBeta and NewPlat, all ended the quarter on a positive territory, with Bettabeta gaining 10.2 percent, while Newgold and Newplat pocketed 3 percent and 1.1 percent respectively.

One of the major highlights during the first quarter was the flat result that was produced by the banking sector during the period, reflecting the low interest rate environment and increasingly competitive operating environment.

“Going forward, we expect relatively flat growth in profits, however income diversification would be the key issue, as interest income has come under huge pressure.

We are also likely to see banks becoming more innovative in order to boost their non-interest revenues.”