Stockbrokers Botswana believes Botswana Telecommunications Corporation Limited (BTCL) share price has room to reach P1.44 and are recommending a 'buy'.
The corporation’s share, which was initially listed on Botswana Stock Exchange (BSE) at P1.15, is now currently at about P0.89.
Some experts believe that the sliding value is linked to the fact that BTCL’s shares trade amongst citizens, limiting the full unlocking of their value. Currently government holds 54.2% of BTCL, followed by individual Batswana who hold about 32%.
The corporation’s privatisation came full circle in 2016 when 1.05 billion shares were listed representing the second largest in the national bourse’s history. The listing followed an oversubscribed Initial Public Offer in which applications received were for a total of 776.3 million shares against the 462 million shares on offer.
However, in terms of investors ushered onto the BSE, the BTCL was far larger, bringing 50,301 new investors and more than tripling the number of domestic investors on the BSE.
“The lifting of the foreign restrictions on the trading of BTC shares remains a pie in the sky in the short term,” stockbrokers said.
Meanwhile, the group recorded a 15% drop in pretax profits to P196.7 million during their March 31 financial results.
However, directors say they expect the group’s ‘significant’ investments in its network in the past few years to monetise this year. They said margins had come under pressure due to restrained consumer spend. This had resulted in a 12% decline on the mobile business despite the introduction of new products and services in the market and other initiatives to promote uptake.
The current financial year is expected to see BTCL focus on reaping the dividends of its investment in infrastructure, directors said. The value of BTCL’s fixed assets rose 12% during the recently ended financial year to P1.5 billion continuing a heavy investment in the group’s infrastructure, particularly the countrywide expansion of the 4G network.