09 Aug 2016

Botswana Telecommunications Corporation Limited (BTCL) shares have been trading on a regular basis since listing and have not experienced lack of liquidity since listing.

A press release from BTCL states that contrary to some recent “potentially misleading” statements, the company has a positive outlook and expects to make profits in the future.

To that effect, the release says BTCL will focus on five key areas of mobile network growth, data and broadband uptake, customer centricity, cost reduction and asset optimisation.

It also says that BTCL’s loss reported for the year ended March 31, 2016 is not an operational loss, but a loss resultant from a P522.4 million impairment charge, that is a write down of the carrying value of the assets of the company to align it to the value they generated.

It further explains that impairment is a non-cash adjustment and the company’s cash position is therefore not affected and BTCL is able to pay dividends against accumulated profits.

Again, it says BTCL has not signed a Shareholder Performance Agreement with the Ministry of Transport and Communications, adding should that come to pass, BTCL will adhere to Botswana Stock Exchange (BSE) listing requirements and ensure that all shareholders are given full details.

The release also explains the BTCL market maker, a market participant that stands ready to buy or sell shares if there are no buyers or sellers in the market, has been appointed for BTCL shares as stated in the prospectus.

A market maker, it says, is a buyer or seller of last resort (within limits set internally) and thus important to note that the BTCL Market Maker will not always provide a bid offer spread, but will do so only as and when it is decided to be feasible given market conditions as determined by the management of the Market Maker.

Further, it says in the prospectus, BTCL has also highlighted liquidity as one of the risks associated with investing in shares since there is no guarantee that there will always be buyers or sellers of shares. The release says as it is not always clear which factor is responsible for any share price movement as change in the share price of a security can be due to a number of factors such as practical demand and supply forces of the stock, company fundamentals, and level of understanding of markets by investors. Ends