Profit taking on BSE ahead of holidays

Staff Writer
Shares prices on the Botswana Stock Exchange (BSE) weakened again last week with sellers outweighing buyers as the festive holiday's profit-taking begins.

The November-December period is traditionally a profit-taking period on most bourses around the world with investors cashing in their stocks.

However, for this year's season, the cash-in began rather late as investors were still riding high on the high wave of renewed confidence creeping back into the markets with the recovery of the world and the Botswana economy.

"Bearish market conditions persisted on the local bourse much to our expectations as investors take a breather ahead of the festive season.

"For example, only 3, 090, 018 shares worth P6, 846, 151 exchanged hands during the week in retrospect, a significant decline from 12, 734, 480 shares worth P36, 039,117 that were traded the previous week," said Gary Juma of Motswedi Securities.

In the week under review, notable volumes were concentrated in selected stocks such as FSG, which traded 1, 800, 000 shares, followed by Letshego 706, 344 shares and FNBB, which traded 208, 834 shares.

Engen continue to reach new highs, pushing 2.4 percent to close at a new 52-week high of 630 thebe. Other gains were in FNBB, A-Cap and Sechaba despite reports that the alcohol levy will be increased from 30 to 40 percent next month.

"Although the increase in the levy is expected to weigh on volumes and revenue, demand for Sechaba shares has remained

high especially from institutional investors who are attracted by the company's healthy dividend policy," said Juma in a weekly market update.

Sechaba has a dividend payout ratio of 95 percent and management have indicated this will not change in the short to mid-term despite the envisaged increase in the alcohol levy.

On the Foreign Equity Main Board, despite gains in African Copper, Discovery Metals and A-Cap resources, the Foreign Companies Index (FCI) lost 0.01 percent to 1, 643.33 points, weighed by a loss in Blue Financial Services, which dropped to 25 thebe as some investors locked in profits from last week's gains. 

African Copper jumped the most last week, up 31.6 percent to close at 75 thebe, followed by G4S, one of the defensive stocks which gained 10.7 percent to close at a new 52-week high of 3, 375 thebe. Discovery Metals pushed 7.4 percent to 768 thebe, whilst Cresta added 3.7 percent to 140 thebe.

Property developers Turnstar and Primetime gained 3.6 percent and 2.9 percent apiece to close at 145 thebe and 180 thebe respectively.

Meanwhile, decliners were led by Blue, which lost 19.4 percent to 25 thebe on profit-taking.

Barclays lost 5.5 percent to 605 thebe after losing on eight trading sessions while tourism operator Chobe, shed 1.3 percent to 135 thebe. IDAYS



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