Bulls back as financial stocks recover

Brian Benza
Staff Writer | Wednesday August 6, 2008 00:00

According to a report by Capital Securities, most of the domestic stocks continue to recover from the lows seen over the last 12 months with financial sector, which is approaching its financial reporting season, in the forefront.

In a reversal of the bearish trend that hit the commercial banks since late last year, Standard Chartered, Barclays, ABCH and BIHL have registered strong gains in the past weeks.

On the other hand, the Capital Securities report says resource sector stocks continue to be volatile, taking the lead from events in their primary markets. 'A number of the companies in this sector saw their share prices drop even further this week,' the report says.

In yesterday's trade,  the mainstrean DCI continued on an upward trend  adding a further 0.01 percent on the back of a higher weighted price of Standard Chartered shares.

On Monday, the DCI opened the first trading day of the week 0.06 percent higher at 7 416.22 points, lifted by the higher-weighted prices of Barclays and BIHL.

But the FCI and the ACI dropped 0.09 percent and 0.08 percent each to close the day at 2 581.48 points and 2 748.06 points respectively. A total of 80,704 shares, valued at P228.462 exchanged hands in today's trading as compared to 142,697 shares valued at P1,406,758 traded on Friday.

'At the close of trading today, CIC Energy was down 37.30 percent to 4013t from its opening price of 6400t. The CIC's BSE price has now synchronised with its price in the TSX after having stagnated at 6400t for a month. The company lost most of its value following an announcement that Phase 1 of the project will be scaled down from 2400MW power plant to a smaller model,' says the stockbrokers report released on Monday.

African Diamonds fell 25.58 percent following news that the company is locked in a dispute with its joint venture partner De Beers. The dispute, which has been brought before the High Court in Lobatse, centres around the decision by De Beers to delay development of AK6 Mine as it feels that the project is not viable in view of power shortages in Botswana.

The counter traded down to 675t midweek, but has rebounded to end the week at 774t. African Diamonds opened the week at 1040t. 

DiamonEx lost 14.38 percent to close at 125t while Discovery Metals shed 27t off its opening price of 295t on Tuesday but rebounded, albeit slightly, losing 5.08 percent in total over the week to close at 280t. African Copper lost 4.61 percent to end at 352t while A-Cap was down 6t to close at 264t. 

'On the domestic board, the financial sector stocks continued to collect more gains over the past week,' the report says. 'Stanchart improved 50t to close at 1600t, Barclays edged up 10t to end at 630t while Letshego perked 15t to close at 1470t.

'BIHL added 10t to end the week at 1100t. A significant 1,943,396 shares were traded on Sechaba at an unchanged price of 1880t. Imara released its financial results for the year ended 30 April 2008. Revenue increased by 36 percent. Profit after tax went up 17 percent to P55.6 million.'

The group is paying a special dividend of 17t per share in cash and an ordinary dividend of 19t per share payable in either cash or scrip at the election of each shareholder to shareholders registered as at 15 August 2008.

A total of 4,964,109 shares were traded over the previous week. The financial, non-financial and resource sectors traded on 978 804, 3 563 148 and 422 157 shares respectively.

Last week, powered by another financial counter Investec, which went up 19 percent to 4,308t on 270 shares as investors took advantage of the current dip in the counter, the DCI closed the week 2 percent higher at 7 411.90 points