Stock Markets Subbed As Investors Become Wary

Staff Writer | Monday August 9, 2010 00:00

 

In last week's trading the Domestic Companies Index's (DCI) six weeks winning streak came to a halt following losses in mid to small capitalised stocks.  Volumes were generally thin except in Letshego, Sefalana and Sechaba as most institutional investors wait on the sidelines ahead of the first half reporting period. Since the beginning of the year, the DCI gained the most in February, but lost ground in March and May.

 'Going forward, we expect investors interest on the local bourse to improve in line with improving global and local economic conditions,' read a market report from Motswedi Securities.

With investors still hesitant to take positions in mining stocks due to the recent backlash from the recession, which crashed commodity markets, analysts expect activity on the stock market to be subdued in the coming weeks.

With the exception of FNBB which will be releasing its full year results, all the listed banks will be releasing their interim results and analysts say investors will be eagerly waiting to evaluate the financial performance during the first half of the year before taking further positions in the market. 

Last week the DCI lost 0.7 percent to close at 7,421.91 points as gains in BIHL and Sechaba were overturned by losses in among others; Sefalana, FSG, Engen and FNBB.

Meanwhile the Foreign Companies Index (FCI) was flat at 1,641.40 points despite movements in Blue, Discovery Metals, African Copper and A-Cap Resources during the week.

Volumes were marginally down as 2,050,419 shares worth P5,327,915 were traded, as compared to 2,576,365 shares worth P5,645,475 that were traded in the previous week.

Most of the trades were in Letshego with 1,314,151 shares followed by Sefalana and FNBB with 300,825 shares and 130,178 shares respectively.

Blue Financial Services came back to winning ways, up 3 percent to 15 thebe as some investors view the current price as a perfect entry level for the stock. Blue has been on the receiving end since the beginning of the year after the micro lender released a poor set of financial results for the year ended February 28 2010. On a Year to date basis, Blue is down 91 percent.

Next in line was Discovery Metals up, 2.7 percent to 500 thebe, recouping most of last week's losses. Insurance giant BIHL and brewery maker Sechaba anchored the list of gainers pushing 2.2 percent and 0.5 percent apiece to close at 870 thebe and 1,000 thebe respectively. 

'We are observing some renewed interest in Sechaba as some investors are of the view that the stock is now undervalued despite the unfavourable market conditions for the company such as the 30 percent alcohol levy and media reports of the ban on Chibuku sales in Kgatleng District. 80 percent of Chibuku beer is sold in homes,' added the report.

On the downside shakers were led by African copper down 16.4 percent, to 46 thebe, followed by Sefalana erasing 10.8percent to 290 thebe. A-Cap Resources lost 3.9 percent to 220 thebe, whilst FSG lost 3.2 percent to 239 thebe ahead of the release of the company's interim results. Other losses were in FNBB, Turnstar, Barclays, PrimeTime and Chobe.