Botswana pension funds that have invested in Turnstar Holdings among them the Public Officers Pension Fund (BPOPF) have lost an estimated P500 million between 2018 and 2022 as the Botswana Stock Exchange (BSE) listed company’s shares plunged by 44% – Sunday Standarddata investigation has revealed.
Two of Botswana’s Forbes five richest men, Satar Dada who invested in Turnstar Holding through his company Associated and Development Investment Corporation Pty (LTD) and Gulaam Abdoola who invested through GH Holdings lost about P200 million during the period.
Turnstar Holdings shares have dropped from P330 a share in 2018 to P185 as at the end of business on Friday, wiping close to P700 million in the value of the listed company’s ten biggest investors – and the bleeding continues.
International investment analysts last week issued a serious indictment against Turnstar Holdings’ future share price, recommending that current investors should sell their stock in the BSE listed company and warning potential investors against buying the stock.
Investing.com a financial platform and news website which is cited as one of the top three global financial websites in the world which offers market quotes, information about stocks, futures, options, analysis and commodities last week assigned Turnstar Holdings’ stock a “strong sell” rating. With a “strong sell” rating, Investing.com is essentially recommending that the entire Turnstar Holdings’ stock be removed from shareholders’ portfolios to mitigate further losses.
When reviewing stocks, Investing.com investment analysts usually provide recommendations, which include buy, hold, or sell. A “strong sell” is a serious indictment of a company’s future share price, which recommends current investors sell the stock and potential investors do not buy the stock.
Sunday Standard can reveal that 12 Investing.com investment analysts unanimously assigned a strong sell rating for Turnstar Holdings shares based on Moving Averages (MA) while none of them recommended a “ buy”.
The moving average (MA) is a simple technical analysis tool that smooths out price data by creating a constantly updated average price. The average is taken over a specific period of time.
Seven Investing.com analysts also assigned a strong sell rating for Turnstar Holdings shares based on Technical Indicators while none of them assigned a “buy” rating.
Under Technical Indicators, the analysts used patter-based signals produced by price, volumeand/or open interest of a security to predict future price movements.
In an apparent bid to allay investor fears and stop the stock free fall, Turnstar Holdings paid out strong dividends last week. This however seems to have had a negative effect.
The ink on Investing.com’s Turnstar Holdings’ investment report, warning against investing in the BSE listed company had hardly dried when on Friday Turnstar Holdings’ share price dropped from P189 to P185 a share.
The extent of the market scepticism over Turnstar Holdings is reflected in the group’s asset base of P 2,5 billion and a market capitalisation of 1.1 billion. One would expect a rush of investors scrambling to buy shares in the company as it appears undervalued, however the reverse is happening.
The current market Capitalisation of Turnstar is P1,081,370,309 and the equity of Turnstar is stated at P1,734,743,667, so Turnstar Equity only has a market value of P1,081,370,309.67, which is P653million less than the actual equity, meaning that Turnstar Equity only has a market value of 62% of its equity.
Sunday Standard data investigation has revealed that Turnstar Holdings’ strong dividend payouts have not been able to offset investors’ losses which arose from the listed company’s share value erosion over the years since 2018.
Sunday Standard data investigation sketched up a hypothetical investor who bought 1,000 Turnstar Holdings shares in 2018 at the then going price of P3.30. Neither tax implications nor stock broker fees have been factored in. Timings issues have also not been taken into account as the assumption is that the purchase was made in Jan 2018 and the investor received the full year’s dividends. Every other value used is in line with the January date for that particular year.
In line with Turnstar Holdings stock performance and dividend payout, the shares have accrued dividend yields every year as per the payouts made by Turnstar Holdings. Given the share price of P3.30 the shares have resulted in an average dividend pay-out of 5.40% annually equating to P890.30 over the financial years 2018, 2019, 2020, 2021 and 2022.
On the other hand, the share price has continued to drop during the period from P3.30 in Jan 2018 to P1.89 as of date. This has resulted in a value loss of P1,410 over that period in the example provided.
When offsetting the dividend yields over this investment period with the share price erosion the result is a net LOSS of P519.70 equating to 15.75% for the investor.
We used the same computation to calculate the loss in value for the top ten shareholders in Turnstar Holdings. We used the shareholders as reflected in the group’s 2021 financial and we assumed the same shareholding from 2018 till to date. The result is reflected in the spreadsheet below.
