Thursday, July 18, 2024

Domestic companies facing a tough battle at the BSE

The Domestic Companies Index (DCI) declined by a further 9.1 percent in the second quarter of 2018, continuing the downward trend that started in the third quarter of 2017.

Bank of Botswana in its first Monetary Report recently launched, shows that the recent decrease was mainly due to the decline in prices per share of among others,  Botswana Telecommunications Corporation Limited (-35.3 percent), Minergy (-19.1 percent) and African Energy Resources Limited (-18.5 percent) by June 2018.

The DCI at the local bourse ended 14th Friday September 2018 on its first positive week in over 3 months, gaining 0.13 percent to close at 8125.26 points while the foreign company index (FCI) was flat, closing at 1570.97 points. The companies in the bourse faces a tough battle with the tough market conditions that have exacerbated to the tough trading in the stock market.

From the Friday 14th figures from Stockbrokers Botswana weekly report, Minergy was the biggest gainer of the week, ticking up by 10 thebe to close at 95 thebe, showing positive sentiment following the granting of a mining license.

From the Monetary report, the Foreign Companies Index (FCI) also fell by 0.7 percent in the second quarter largely due to the year on year decrease in price per share of Lucara (-16.8 percent) and Botswana Diamonds plc (-9.1percent).

The Stockbrokers Botswana last week’s report showed that, “BTCL continues to register losses as retail investors increasingly flood the market with shares, the counter shed 5 thebe to close at a new 12 month low of 94 thebe.”

Looking at the current year-to-date gainers, tourism giants Wilderness, Cresta and Chobe are amongst the top eight stars with having realized the changes of 10.91 percent, 15, 04 percent and 12, 10 percent respectively.

Crawling at the bottom of all BTCL is the biggest loser of the year-to-date having dropped drastically by -48.91 percent from 184thebe from 31st Dec 2017 to 94thebe ending the week last Friday, September 14th.

With effect from 1 January 2018, the BSE introduced the Domestic Company Index Total Returns (DCI-TR) following Main Committee and Non Bank Financial Institutions Regulatory Authority approvals in December 2017. As at 31st March 2018, the DCI-TR had depreciated by 1.9 percent, reflecting the cushioning effect of dividends on the weakening of prices over the quarter.


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