The Botswana Stock Exchange (BSE) closed the first quarter in buoyant mood, powered by the small and medium size companies while the giants were on the sidelines because of their prices, brokers said on Friday.
?The market was far more active over the past quarter and the small caps (companies) were the prime movers,? Gregory Matsake of Capital Securities said.
In the three months to March this year, the market grew by close to 25 percent?largely driven by small companies ? which is one of the greatest margins in its history.
Over the period to the end of March, Sechaba Brewery Holdings rose from the slumber as it traded over 2 million shares with its share price re-rating to P 15.00 band .
Some of the counters which were active were Letshego Holdings, Botswana Insurance Holdings Limited. Barclays embarked on its share split and A Cap?the nuclear prospecting company ? moved up to P 10 or trading at eight times from the price of initial listing.
FurnMart, G4S and Metsef also staged a sterling performance for a variety of factors?including regional expansion, regional forays and new turn-around strategies.
DiamonEx embarked on capital raising initiative for the mine construction plan in Lerala while Turnstar was on right issue.
Following the announcement of its regional expansion plan, Letshego moved from P 8.00 as of January 3, to P 10.50 by March 30. The company has opened operations in Uganda, Swaziland and Tanzania. It is closely looking at opening operations in Zambia, to be followed by Lesotho later.
?There was a lot of activity during the period. The problem was that the activity was driven by the small companies. Had it been the giant companies, the index would be totally different because of their size,? he said.
Barclays, the biggest company by market capitalization, sagged over the period after its price per share was thought to be running ahead of its valuations. The company embarked on a share split after its share price hit the P 40.00 band.
?Barclays? share price was retail investor driven and its price was ahead of its valuations. We are not surprised that it is now coming down,? Matsake said.
? Barclays was almost stable this year. We are up because of the mid cap companies,? Geoffrey Bakwena, head of Stockbrokers Botswana said, adding that the market might be moving into a bear period this quarter.
?We?ll probably be moving into a cooling down period because the blue-chip prices are high,? he added.
His comments are prompted by the First National Bank of Botswana and Standard Chartered Bank of Botswana which are at between P 20 and P 25 band swing, per share respectively. Everything equal, both banks are expected to enter into a share split either this quarter or early in the third quarter.