The Botswana Stock Exchange (BSE) losses continued in the second quarter of the year as major equities continue to shed value, extending the rout that began in 2016, with property stocks losing the allure and tourism listed companies bucking up the trend to deliver solid returns.
The Domestic Company Index (DCI), BSE’s benchmark index, is down by 2.2 percent in the second quarter after opening at 8, 589.64 in April and closing the quarter at 8,402.66 in June. The second quarterly loss while lower than the 3.1 percent loss recorded in the first quarter, has cumulatively added to the 5.3 percent loss recorded in the first half of the year, much bigger than the 2.2 percent losses during the same period last year. On a year to year, the DCI dropped 9 percent, bringing total losses to 16.1 percent over the two years since the rout began.
The BSE’s recently introduced Domestic Company Index Total Returns (DCI ÔÇô TR) weakened by 1.9 percent, a lower figure compared to the DCI, reflecting the cushioning effect of dividends on the weakening of prices over the quarter. Data from BSE shows that trading activity and liquidity has improved, notching P1.1 billion from 411.6 million shares traded. During the same period last year, BSE recorded a turnover of P903.8 million from a total volume of 291.4 million shares.
The downward pressure on the DCI comes as majority of the listed companies continue to see their stock value drop, despite some of them posting positive results. Leading the losses is Botswana telecommunications Corporation (BTC) which has shed off 33.2 percent in the first half of the year to trade at P1.23.
Minergy which listed last year lost 19 percent to trade at 0.85 thebe, off from the highs of P1.05. Other losses for the quarter included the embattled Standard Chartered Bank Botswana dropped 17.3 percent to trade at P4.25; the property listed stock Letlole La Rona tanked 15.3 percent to P1.82; the usually resilient Barclays Bank Botswana at P5.49 shed off 9.2 percent with uncertainty following its parent company’s unbundling from Barclays Plc; Sefalana slid 8.4 percent to P8.93, while G4S is 7.3 percent lower at P3.70.
There was strong resilience from tourism listed companies, reflecting another trend from the first quarter as they delivered positive capital gains. Cresta gained the most at 10.6 percent to trade at P1.26, making it the best performing stock under the main counter of the BSE. Chobe advanced 9.2 percent to its all 12-month high of P10, while Wilderness Safari edged 6.4 percent to trade at P5.85, also marking its 12-month high. Choppies share price was in the safe zone at P2.44, up 0.8 percent as the stock continues to defy the negative sentiments surrounding retail margins. Stocks that were flat at the end of the second quarter include New African Properties, Far Properties and Afinitas.