Friday, April 16, 2021

BSE shines as Letshego stages surprise share price surge

Letshego Holdings Limited, the Pan African micro provident outfit, pulled up the Botswana Stock Exchange (BSE) with a strong cash injection as profit taking show-down meted against its peers threatens to  dry up the market at the opening of the business this week.

The Domestic Company Index  (DCI),  held up at 6.7 percent year-to-date  on Monday as it edged up 0.48 percent in the midst of torrential slides by Botswana Insurance Holdings Limited (BIHL)  and  other mid cap companies.

“This was a clear case of profit takings,” Garry Juma, an analyst at Motswedi Securities, said Monday as BIHL, Chobe Holdings were snarled in a fog of profit taking┬á as the year approaches festive season.
“We are likely to see (this sort of) mix trading┬á in the four weeks to the end of the year,” he added.

However, Letshego Holdings pulled a surprise as its share price urged up 125 thebe to 1600 thebe over 83,000 shares to raise P 1.3 million just in one day. This was the first time for Letshego to reach the 1600 thebe sensational mark per share since  December 2007, when it recorded 1649 thebe per share.

“I think Letshego performed well as it did during its results,” Juma said.
Letshego staged another surprise in its half year results to the end of ┬áJuly as its turnover shot-up by 66 percent like- for- like to P 277, 400 million ÔÇô driven by┬ápentÔÇôup┬á household demand┬á in a recessionary year.

Advances to customers surged by 48 percent to P 1.5 billion as interest rate insensitive customers largely being civil servants remained clued to company.  In its move, aimed at contemptuously defying the recession, profit before tax was up 65 percent to P 212 million that was backed by a similar growth margin in attributable profits that edged up to P 159 million.
“I think investors like its outstanding performance in a recessionary period thus why they are buying its shares,” Juma said.

Geoffrey Bakwena, chief executive officer for Stockbrokers Botswana, concurred saying what  transpired Monday was profit taking by retail investors who are pressed to finance some household activities without looking at the long term  benefit of the investment.

“You will see that some of these people who are selling want to finance their holiday during the festive period or want to cash in that money for school fees. I say that they are retail investors because most of them have not traded a substantial volumes of shares,” he said.

Despite attacks from retails, investors are optimistic that the  Botswana Stock Exchange  will close the year in a positive territory unlike last year.
“I do not think that we are going to close on the negative territory. I think we are going to┬á close on the positive,” he┬á said, adding that “there is no way we are going to lose six percent in four weeks.”

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