Old BSE indices won't be discarded - Soko

Staff Writer | Tuesday February 12, 2008 00:00

 

BSE listing and trading manager Bopelokgale Soko says they decided to introduce the new indices due to concerns - mainly from fund managers - that the old indices were not fully effective in showing the growth of their investments.

The Local Asset Status Index (LASI), the Foreign Resources Sector (FRSI) and Domestic Financial Sector Index (DFSI) came into effect from the beginning February, replacing the Domestic Companies Index (DCI) and the Foreign Companies Index (FCI) which Soko says will not be completely discarded as they are still useful in their own way.

'The DCI only showed capital gains and did not factor in dividends paid out on securities,' she says. 'This is one of the reasons why we have introduced the new indices which reflect the total returns on shares held.

'However, the DCI is still a comprehensive index which can show the growth of the Botswana market, hence it will remain in use for the foreseeable future.'

The generic nature of the old indices also made it necessary for them to invent the new, more effective ones.

'If you look at the old indices, they lump a lot of counters from different economic activities in one, which does not give a clear benchmark on the specific sectors,' Soko points out.

LASI will consist of all domestic companies and all foreign companies awarded local asset status by the Ministry of Finance and Development Planning, the FRSIU will be composed of all foreign resource sector companies listed on the bourse, while the DFSI will consist of all domestic financial services companies listed.

Meanwhile, the DCI again lost some ground last week, marginally shedding 0.24 percent on the back of subdued performance by financial counters which constitute over 70 percent of the DCI. They recorded little movement, with Barclays losing 1.43 percent.

The largest gainer of the week was CIC Energy, which added on 11.1 percent, followed by  African Diamonds (6.71 percent), PrimeTime (5.56 percent) and Sefalana (3.37 percent), which recently announced their  interim results and declared a 5 thebe dividend.