Tuesday, December 5, 2023

Banking sector to trigger BSE rebound – analysts

Analysts this week punched the air at the Botswana Stock Exchange (BSE)’s rebound and expressed hope that the impending banking sector reporting period, which starts next month, and a move by Bifm to clear the air on the controversial sale of shares to its executive members, will come in days.
BSE was this week poised to continue a second month straight gain, edging from 7 175.24 points on June 27 to 7 243.54 points on Thursday.

“There is a general discovery in the market and we hope that the mid year ÔÇö- the impending banking results ÔÇö will add a sparkle to the general trade in the market,” head of Capital Asset Management, Leutlwetse Tumelo, said.

The week market was trading at a very high note, with mid cap and micro-lending outfit, Letshego Holdings, trading one million shares, albeit flat at 1450 thebe per share to stimulate interest in the financial sector.

The move was a follow up to the First National Bank of Botswana (FNBB), which sold P 10 million worth of shares, while Turnstar Holdings saw shares, valued at P 14 million, exchanging hands within the same week.

“What is happening is that people whose shares in 2006, before the 74 percent in the market value, are realizing that there is value in their shares. They are now willing to sell while there are buyers who are eager to get those shares,” Chief Executive Officer of Stockbrokers Botswana, Geofrey Bakwena, said.

“We are also seeing people who bought last year, before these shares took a deep nose-dive, coming back to the market as buyers. We believe this mood will continue up to the end of the year,” he added.
African Banking Corporation, Barclays Bank of Botswana, Standard Chartered Bank of Botswana, the three banks whose results were affected by the collapse of Lobtrans at the close of last year are also expected to release solid half year results which are expected between next month to September.

Meanwhile, FNBB, the bank that is crowned of being the most innovative and the fastest growing, will release its full year results, which analysts have expressed confidence that they would also come out in line with expectations.

The banking stocks are the driving force within the fledgling BSE as they account for over 70 percent of the market capitalization.

Confidence in the market is also bolstered by Botswana Insurance Fund Management’s (Bifm’s) biggest shareholder Sanlam, whose chief executive responsible for investment management, Johan van der Merwe, is scheduled to fly into Gaborone between July 29 and 30 to clear the air on the controversial sale of a stake in the company to its Batswana executive management.

Although details of the meeting are still sketchy, it is understood that the local executive has said it was an oversight on their part not to warn the market about the transaction that was understood to be very “lucrative”. The executive bought the 17 percent stake for P 30 million but spoilt the deal by pouring vinegar in what was supposed to be “stock option deal” by including a non executive director into the arrangement.


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