Thursday, June 13, 2024

Botswana Stock Exchange registers remarkable growth

It was a great year for the Botswana Stock Exchange, marked by improved trades and gains in listed stocks. The BSE’s Domestic Company Index (DCI), which tracks share price performance of the 24 listed companies on the domestic counter, grew by 10.8 percent in 2022, making it the biggest growth to date since 2015.

The local stock market managed the double digit growth as the management pressed ahead with its strategy to lure investors, positioning the bourse as a safe haven for their investments. It’s a remarkable growth after years of the declining benchmark index. 

The DCI fell by 11.3 percent in 2016, before recovering slightly in 2017 with a 5.8 percent loss, and continued to stumble over the years with losses averaging 11 percent. In 2019, the DCI narrowed losses to 4.6 percent and while 2020 begun strongly for the BSE, it ended the challenging year with the index down by 8.2 percent. However, the DCI stunned observers as it grew by 1.9 percent in 2021, making positive gains after six years of downward spiral.

The sustained upward trajectory in share price for some companies has been on the back of solid profits that are defying the economic headwinds, allowing the companies to give out bigger dividends to shareholders.

Leading the top gainers on the stock market for 2022 is Botswana’s oldest commercial bank Standard Chartered Bank, with the share price surging by 46.4 percent to trade at P2.87. Though the gains are impressive, it’s a long way to the top for the bank which in 2015 was trading at the highs of P15 before the share price plummeted amid string of losses. However, Stanchart which has been operating in Botswana since 1897 has seen its fortunes turn around as profitability significantly improved.

First National Bank Botswana (FNBB), the country’s biggest bank by profitability and assets, clinches the second position after the share price soared by 40 percent to trade at P3.50, delighting its investors. The bank remains one of the most profitable entities in Botswana, with post tax profits hovering around P1 billion.

Property listed Letlole La Rona rounds off the top 3 after its share price climbed 36.4 percent. The company proved its resilience as well, posting profits while venturing into markets outside Botswana, promising unit holders better returns.

Sechaba, which is part owner of the biggest brewery in the country, has started to post impressive financials after overcoming challenges caused by COVID-19 protocols that saw frequent alcohol bans which affected operations and spooked investors. With its profits now up, so has the share price which increased by 18.6 percent to trade at P19.82.

Closing up the top five gainers is ABSA, the second biggest bank in Botswana, gaining 11.21 percent to trade at P5.16. ABSA continues to post profits even after its separation from Barclays Plc, a development that has assured its investors if there were any fears of deterioration.

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