Monday, October 18, 2021

BSE DCI ticks up

The Domestic Companies Index (DCI) of the Botswana Stock Exchange (BSE) ticked up by 0.20 percent to close last week at 6900.67 points. On the other hand, the Foreign Companies Index (FCI) had a flat week, to close at 1548.83 points.

Local financier – Letshego gained P0.03, and Engen P0.17, – with the two counters being the week’s only gainers closing at 118 thebe and 1030 thebe, respectively. Meanwhile the ETF NewGold (-780 thebe), and BTCL (-2 thebe) were the only losers for the week closing at 18170 thebe and 68 thebe, respectively. Turnover for the short trading week amounted to BWP3,837,774 as 1,530,523 securities exchanged hands. Sefalana (47%), was the biggest contributor to the week’s turnover.

From January to August 2021, the Domestic Company Index (DCI) – which tracks share price performance of the 24 listed companies on the domestic counter – depreciated by 2 percent, much better than the 5.9 percent loss in the corresponding period in 2020.

While the third quarter is yet to complete this month, the BSE is already up by 1.8 percent and stronger than the 1.4 percent gains in the second quarter – which was a strong comeback from the 5.1 percent depreciation in the first quarter of the year.

The Domestic Company Total Return Index (DCTRI), which includes dividends in calculations, appreciated by 1.6 percent, a major reversal from the 2.3 percent reduction in the same period last year. The DCTRI ended the second quarter of 2021 up 4 percent and retreated slightly to 2.2 percent in the third quarter.

The resurgence in the BSE’s benchmark index will calm investors who been monitoring the decline in market capitalisation since 2015. The momentum in share price gains has been on the back of solid profits from listed companies that are defying the economic headwinds.

The DCI fell by 11.3 percent in 2016, before recovering slightly in 2017 with a 5.8 percent loss but 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.

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