Atleast five indigenous companies had their stock classified as “BUY” by local stock brokering firm, Motswedi Securities in its latest recommendations report compiled last week.
In its review of stocks at the Botswana Stock Exchange (BSE), Motswedi Securities, put forward five domestic companies stocks out of the total 23 listed as some of those that are either undervalued, or have strong opportunities for growth.
The entities entail the Botswana Telecommunications Limited (BTCL), Chobe, Cresta, Letlole and Sefalana.
The recommendation report groups the stocks into four nudging actions being buy, hold, reduce and sell. From the 23 stocks none was recommended to be sold. The majority of the stocks were listed as those to be held such as the two top tier banks, Barclays and First National Bank Botswana, Letshego, G4S and Primetime. Only three stocks were proposed to be reduced and that is, Choppies, Sechaba and Stanchart.
For BTCL to have been endorsed for buying speaks volume of its reversed misfortune which it suffered shortly after being listed on the local bourse. It had seemed for some time that BTCL was losing its public reverence, but it is today relishing a wholesome comeback from once being discarded to now being stock local analysts pulled investors towards. BTCL came into the market last year in esteemed glory but its share price dissolved itself from the grandeur taking rather the opposite direction. The share price fell sharply from its list price of P1.00 over a short period of time. From the recommendation report BTCL had a 52 week high of P1.47 depicting a healthy move from not only its initial price but from its trough. It however had a 52 week low of P0.84. On close of business last week BTCL was priced at P1.47. The other stock held in the same regard is Sefalana, this is despite its recent disappointing financial results.
A stock that deserves its recommendation to be held is NAP. This is because NAP is behind the record broken by BSE of registering the highest turnover ever recorded in its history in a single day. NAP’s trailblazing ramp up of shares that changed hands on BSE was experienced in 2016 and second in 2017 with a turnover that came very close to the first, thus being the second highest turnover the bourse had ever recorded. Another stock that worked hard to earn the hold recommendation is Letshego. Having once believed it was undervalued Letshego took proactive steps to improve its attractiveness to investors, a move that later produced a favorable outcome. It also has been making recognisable regional moves having recently announced that it will through its subsidiary in Namibia offer its shares for sale to Namibians through a planned Initial Public Offering (IPO). It said through this process that it is enabling the people of Namibia to be part of Letshego Namibia’s history of improving life. The planned IPO will be a first of its kind on the Namibian Stock Exchange (NSX) and will give preference to Namibian residents with a primary aim of educating members of general public.
It is not surprising that Stanchart was proposed to be reduced. The bank announced that its shareholders should expect its financial results for the period ended June 2017 to be significantly lower than those achieved in the corresponding period in 2016. In addition to the unsatisfactory financial results Motswedi Securities also cited in its recent second quarter economic bulletin that, “Stanchart saw a massive 14.1% price slip, the biggest move of the quarter. We do not believe that the bank is out of the waters just yet, although activity on the counter is slowly improving, with volumes showing participation by institutional investors and not only desperate to sell retail investors. It might be too soon to say the company has turned a corner, but the last financials (Dec 2016), showed an improvement on profits before tax of over 50%, enough to raise interest on the counter.” Stanchart had a 52 week high of P14.00 but it ended the day on Friday at a price of P5.60