Botswana Stock Exchange’s only listed telecommunication company, Botswana Telecommunications Corporation (BTC) is keeping its shareholders awake at night as its share price continues to lose value at an alarming rate.
The company, which is partially owned by the government, has had its share price falling more than 40 percent since beginning of the year, leaving investors scratching their heads as what could be sparking the drop in price.
The slump from the peak of P1.85 to the current trading price of P1.05 means shareholders – who bought at the IPO price of P1 in April 2016 – have seen their capital gains declining by 42 percent to a measly 7 percent in returns.
The slide in BTC share price has damped what looked to be a stellar rebound from a stock that took battering in its early days of listing, as at one point traded below the listing price. However BTC later recovered following the appointment of a market maker who ensured that the stock remained liquid, enticing investors not to go on a panic selloff which invariably brings down the stock price.
It is not clear now why BTC stock has been losing value this year given the company’s strong financials and prospects. The drop in the share price could perhaps be part of the wider market rout: Of all the twenty three listed companies on the domestic counter, only four companies managed positive year to date returns, even then, the returns have been small in size.
Of course none of this matter to most individual investors who got involved in the stock market through BTC IPO which was preceded by a nationwide awareness campaign and ended with a record breaking number of domestic investors. The BTCL IPO ushered in more than 50 000 citizen investors, prior to that there were only 28122 registered Central Securities Depository Accounts (CSD).
The panic amongst BTC shareholders will likely undermine BSE’s efforts to increase citizen participation in the stock market as a way of growing their wealth.
“When i bought shares during the IPO, we were told that it is a good investment but now we see the share price going down, and to be honest i don’t know what is going on. Maybe i should sell before i completely lose out on my gains,” confided one shareholder who did not want to be named.