BSE market cap reaches historic P50bn mark

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Market capitalisation for the domestic bourse reached the P50 billion mark in the second quarter of this year, which is the highest in the history of the Botswana Stock Exchange (BSE).

Compared to the end of the previous quarter of P45.3 billion, market capitalisation edged up by 11 percent to P50.5 billion this quarter.

According to a quarterly report from Motswedi Securities, during the second quarter, 241 million shares worth P944.8 million exchanged hands.

This was significantly higher than the trades in the prior quarter, thus a 57 percent increase in volumes and 69 percent surge in value traded. The highest volumes were registered during the month of May. The report states that huge quarterly volumes were mainly from Letshego, which has been topping the trades for a sixth straight quarter.  The microlender exchanged 35 percent of those volumes while property giant Turnstar Holdings Limited and First National Bank of Botswana (FNBB) exchanged 10.4 percent and 8.5 percent respectively. Motswedi Securities further noted that despite the obvious trend of having high liquidity from the large capitalisation, some of the small market stocks like Cresta Marakanelo and Imara Holdings Limited were very active during the quarter under review.

Letshego posted a daily average of about 1.4 million shares while other counters recorded less than 500,000 of daily shares traded, reflecting the increased liquidity of Letshego relative to other stocks. All the three months recorded modest gains relative to other months during the quarter, with the highest monthly gain of 5 percent in May. This was the only quarter where the domestic companies index (DCI) made positive month-on-month gains since the beginning of 2014.

“We have seen the uptrend of the DCI since the beginning of 2012 as it rose from 7,000 to end the quarter above the 10,500 points mark, portraying the vigorous growth achieved from most of the counters such as Sefalana, Sechaba and Chobe among others,” reads the report.

On a quarter-on-quarter basis the DCI leaped up by 10.3 percent, the second highest in more than four years, as compared to the previous quarter where only 2 percent growth was registered.

Almost 90 percent of the domestic counters ended the quarter on a positive footing, reflecting upbeat sentiments towards most of the counters, leading to a market average price-earnings (P/E) ratio of almost 15x, the highest in more than two years. Wilderness Safaris was the largest gainer surging by 43 percent as investors were taking in their full-year results, which were characterised by a 57 percent rise in profit after tax, while its topline posted a 12 percent year-on-year increase.

However, the company released a cautionary statement stating that it received a notice of intention to make an offer to acquire all the issued ordinary shares by Wine Investments Limited though the statement was later withdrawn.

Letshego’s planned share buyback brought enthusiasm to the market as it surged to reach its highest levels, since its share split, of 350 thebe just before it receded to end the quarter at 320 thebe.

The microlender also issued another cautionary recently, regarding a potential acquisition in Nigeria involving a 100 percent shareholding in a deposit taking financial institution, which specialises in micro finance.

Chobe was also another gainer during the quarter, with the market responding to its upbeat year-end results. The tourism outfit saw its bednights sold grow by 11 percent year-on-year, buoyed by a stronger US dollar.

Meanwhile, Choppies’ listing on the Johannesburg Stock Exchange (JSE) was one of the major highlights not just for the quarter, but also for the Botswana market at large.  Other gainers for the quarter were Turnstar and Botswana Insurance Holding Limited (BIHL) as they gained 19 percent and 13 percent respectively.

The foreign counter mainly dominated the negative territory, with African Copper taking the largest hit, plunging by 90 percent.

On the main board, Furnmart shed 22 percent while Engen slid by 12 percent to end the quarter at 163 thebe and 820 thebe respectively.

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