Thursday, August 5, 2021

BSE’s black Monday

It was a black Monday at the Botswana Stock Exchange as companies continue to shed value, reflecting negative sentiments investors might be having as the pandemic drags on, affecting profitability and dividends.

ABSA Bank Botswana led the losses on Monday, dropping 18 thebe off its share price to trade at P4.52. The second biggest commercial bank in the country has lost 9.4 percent of its market value since the year started, making it the second biggest loser on the main domestic board.

Embattled Sechaba Brewery Holdings Limited began this week by losing 10 thebe as investors processed the Friday announcement that profit before tax will be approximately 15 percent (P29.1 million) lower than the P197 million reported for the year ended 31 December 2019. The company’s share price has tumbled by 12 percent since the year began, fuelled in part by the national alcohol sales ban that ran from January until end of February.

Property giant Turnstar Holdings, which owns Game City Mall, continues to have  a rough start to the year, shedding of 10 thebe to trade at P2, bringing its year-to-date losses to 20 percent – making it the biggest loser. Mall tenants have complained about reduced foot traffic at malls and limited trading hours due to the curfew, resulting in lower sales and in some cases, failure to meet rental obligations.

The Domestic Company Index (DCI), which tracks share price performance of the 24 listed companies on the domestic counter, has in the past two months depreciated by 3 percent in comparison to an appreciation of 1.4 percent during the same period in 2020 and the Domestic Company Total Return Index (DCTRI), which includes dividend returns,  also depreciated by 2.8 percent in comparison to an increase of 1.6 percent in the corresponding 2020 period.

For the fifth year straight, the DCI  has been on a downward trend, falling 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 average losses a bit over 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 8.4 percent.

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