05 May 2014

The Botswana Stock Exchange (BSE) was active last week as only five counters were not traded.

The property market dominated the local bourse led by Turnstar and Primetime. A weekly market commentary from Motswedi Securities states that the Domestic Companies Index (DCI) shed 52 points drifting away from its 12 month high as investors cashed in their profits after an exciting reporting season which brought a mixed bag of results from the local stocks.

Property counters dominated the action, with Primetime contributing 58.5 percent and Turnstar 30 per cent. Primetime achieved a six per cent growth in rental income for their half year results for the six months ended February 28, 2014.

Turnstar results were characterized by a 137 per cent surge in profits after tax and the counter went up to a new 12 month high of 188 thebe.

“The property giant, which has a portfolio valued at about P1.7 billion, gained 3 thebe for the week under review,” said Motswedi Securities. Engen continued to post growth for two consecutive weeks after it gained 2 thebe to trade at 932 thebe.

The petroleum giant which has about 20 retail filling stations in the country is among the top gainers for the year so far, at 13.7 per cent. News of positive results brought excitement to investors as Chobe leaped by 1 thebe to trade at 341 thebe. Meanwhile Barclays closed the week at 426 thebe after gaining 16 thebe.

The bank has rebounded from its 12 month low of 381 thebe. During the reporting season Barclays failed to meet expectations after realizing a 34 percent decline in profits after tax year on year for their financial year results.

“Going forward, a lot would be expected from the new managing director to turn the bank’s fortunes around, which is the second largest bank by advances,” said Motswedi Securities. Botswana Insurance Holdings Limited (BIHL) plunged by 30 thebe trading at 1070 thebe as profit takers came on board after its uptrend following their financial year results.

Motswedi Securities said investors remained concerned about increased competition in the insurance industry which led to a slight decline in the group’s net premiums year on year. BIHL however registered a 161 per cent increase in other income at the back of a rebound in the global markets.

Letshego shed 3 thebe as a response to their financial year results after profits after tax declined by 2 percent. First National Bank of Botswana (FNBB) and Stanchart shed 1 thebe apiece to trade at 349 thebe and 1174 thebe respectively, as worries towards interest margins in the banking sector persists within the market.

Stanchart has the lowest impairment ratio within the banking space and has realized a 25 percent increase in profits after tax for their financial year results. FNBB, which has about 21 percent of the domestic market capitalization, released their interims, achieving a 10 percent increase in net interest income.

“Although non-interest income within the banking industry will be expected to come under pressure due to the central bank moratorium, FNBB has managed to consistently increase their non-interest income with a 5 year average growth of about 18 percent,” said Motswedi Securities.

Attention remained on the domestic front as investors shunned the foreign board because it mainly consists of mining companies at exploration level, which resulted in only one counter trading on the foreign board.

On the Exchange Traded Funds (ETFs), Bettabeta slumped by 65 thebe to trade at 4085 thebe while Newgold surged by 210 thebe trading at 10970 thebe per unit. In the foreign exchange market, the Pula advanced against the US dollar, euro and the yen but retreated relative to the rand.

The local crawling unit shed 0.2 per cent to the rand but rebounded by 0.3 and 0.7per cent to the greenback and yen respectively. Ends