Wednesday, November 25, 2020

Wilderness fails to take off but remains stock steady

The market was this week unfazed by the Wilderness Holdings Air Botswana take over fiasco.

Despite the public backlash to government’s recent attempt to partner with Wilderness Holdings in revamping the national airline, the hostility hardly registered a blip on the national burse radar.

Rebuffed by the media expose, Wilderness Holdings withdrew its Expression of Interest (EOI) but it stock remained unshaken.

The lack of significant price movements in Wilderness stock was observed at its primary listing on the Botswana Stock Exchange. 

The company has a secondary listing on the Johannesburg Stock Exchange. Typically investors tend to react to news that surrounds the stock in which they have a stake in as a reflection of their confidence in the stock.    

Market commentators attributed this mute reaction to the prevailing lack of liquidity in the market, which is one of the factors that determine the buying and selling of the stock, as a result limits trading. 

This means that even if an investor might opt out there is no guarantee that another one will want to buy in. More specifically the commentators described the Wilderness Holdings stock as a tightly held stock. 

Addressing the media last week at the second quarterly press briefing on the Ministry of Transport and Communication activities Minister Kitso Mokaila explained that the selection of Wilderness Holdings from the 17 companies that had also expressed interest was because it “came with access to other markets”. 

He also said that the company’s charter business with a total of 33 aircrafts, which he expressed is the largest aircraft fleet in the country, could have added on to Air Botswana in terms of servicing the thin routes into the country’s remote attractions. 

For example to reach its Linyanti concession which is located in the north-western corner of Chobe National Park on the border with Namibia, Wilderness Holdings transfers tourists via aircraft from either Maun or Kasane to the Saile airstrip in Chobe National Park and then drive them to the tented camp.  

In addition Wilderness Holdings was formed in Botswana in 1983 but today has an African footprint across six countries including Botswana. The other five countries are Namibia, Zambia, Zimbabwe, Seychelles and South Africa. According to the company’s 2016 annual report entry into the seventh African country, Kenya, was underway. 

Mokaila said that the company’s regional presence was seen as an opportunity to boost the Air Botswana brand in terms of attracting tourists into the country. Another plus to Wilderness Holdings was its in integrated booking system with its trade partners also provided an opportunity for Air Botswana to offer a direct route from tourists’ country source into Botswana. These, he said, is what gave the company an upper edge. He stressed to that regard that discussions around these factors were yet to take place. Now however the withdrawal of Wilderness Holdings from the privatisation process takes such discussions off the table. 

According to the Motswedi Securities market data for the week ending June 16, 2017 the lowest price that the Wilderness Holdings stock declined to in the last 12 months was P4.90 By the end of last week BSE indicated that the stock closed at a price of P5.25 without notable changes from the start of the week. 

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