Former Chief Executive Officer of the Botswana Telecommunications Authority (BOCRA) ÔÇô Thari Pheko has purchased 110 000 ordinary shares of Botswana Telecommunications Corporation Limited making it to be one of the largest purchase by an individual investor.
Pheko is a board member and director of the BSEL quoted teleco and thus forced to divulge information on the dealings with the company’s securities.
According to a statement issued to capital markets late Friday, Pheko made an on market purchase of ordinary shares valued at P97, 900. 00 on 10 July 2019. This was hardly a few days after Pheko together with board chairperson – Lorato Boakgomo-Ntakhwana made an appearance at the company’s presentation of its financials in the capital Gaborone.
Meanwhile the BTCL stock is expected to continue changing hands amongst Batswana only excluding foreigners at the local capital market. This follows a decision that was taken by the majority shareholder ÔÇô the Botswana government at the time of listing the company to impose a trade restriction on the stock.
This past week, BTCL board chairperson – Boakgomo-Ntakhwana said it will take a little while before the current set up is changed.
The comment follows numerous calls to the main shareholder to consider opening the share trading to other market participants including foreigners.
“The major shareholder is warm to the idea, but not yet hot”, Ntakhwana told capital markets community who gathered for the BTCL financial year results this past week.
She however said that the negotiations are likely to take a while before they come to fruition due to an anticipated split at the parent ministry if BTCL ÔÇô Ministry of Transport and Telecommunications.
During 2018, BTCL ÔÇô which is the only listed teleco, had its performance becoming the subject of speculation amongst the market players including ordinary shareholders. The company’s stock price went on a rollercoaster plummeting to 0.84 thebe earlier that year and staying below its IPO price of P1.00 for most part of that year and even to date.
At one point during 2018, Garry Juma – a stock analyst at Motswedi Securities broking firm cautioned that the BTCL stock performance going forward will remain volatile due to retail investors who hold bulk of the shares. Retail investors tend not to generally follow any fundamentals.
BTCL’s top six shareholders include the government with its 54.16 percent, Botswana Public Officers Pension Fund with 7.37 percent, Farouk Ismail (0.69%), Debswana Pension Fund (0.63%), Botswana Police Savings and Loan Guarantee Scheme (0.52%) and Motor Vehicle Accident Fund (0.40%).
Other than Juma, local stock analysts have long warned that the trading restriction that was imposed on the BTCL stock will have an adverse effect on the liquidity and price discovery of the company.
Thatayaone Motsomi of Stockbrokers Botswana asserted in 2018 that BTCL is largely traded by retail investors who are primarily concerned with meeting their own liquidity needs hence they believe that selling will continue to outweigh demand.
“We have gotten enquiries from both foreign retail and institutional investors about whether or not the shares will be opened up to foreigners, indicating interest in the stock. If the restriction was to be lifted we believe we would see significant demand for the stock which could drive it towards its intrinsic value,” Motsomi said last year.