Tuesday, December 5, 2023

Sechaba share price falls as liquor ban remains in place

Sechaba investors are increasingly becoming pessimistic about the company’s future, with some this week sending the brewer’s share price tumbling, concerned about the almost two months alcohol ban imposed by the government. 

The shuttered Sechaba Brewery Holdings lost 6.7 percent of its share price in a single week to trade at P18.25, a sign that the shareholders are becoming fed up with the alcohol ban that has forced the company to temporarily close operations. The share price had been resilient despite the alcohol ban that has been in place since the beginning of the year, but on Monday the stock that opened the year trading at P20.65 shed P1.40 from its value, and the following day the share price dropped by a further P1. 

Sechaba’s subsidiary Kgalagadi Breweries in early February suspended operations as it became costly to continue operating while the sale of liquor has been banned, and the company cannot retrench workers due to the state of emergency that prohibits worker dismissals on account of Covid-19 disruptions. 

In other losses, ABSA Botswana, the country’s second biggest commercial bank, lost 50 thebe to end Monday trading at P4.80, extending the bank’s year to date loss to 9.4 percent, and making the stock the second biggest loser of the year so far. The negative sentiment follows announcement from the country’s top lender First National Bank that its interim profit will be lower by a quarter. 

Botswana Telecommunication Limited (BTCL) share price continues to plunge after a slight rally late last year. The telecom share price has declined by 14.63 percent since the year began.

The Domestic Company Index (DCI),  which tracks share price performance of the 24 listed companies on the domestic counter, was down by 0.39 percent in the second week of February. A total of 14.6 million shares valued at P14.4 million were traded in that week.

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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