Choppies leads BSE in January
Mbongeni Mguni | Tuesday February 4, 2014 15:12
Choppies led the BSE in its listing year of 2012, gaining 78% in the 12 months after its January 26 debut. In 2013, the retailer was the third highest gaining counter on the BSE, returning gross value of 63.9% to its shareholders.
As at last Friday, Choppies’ share price had risen more than three and a half times from its listing price of P1.15, being one of the most sterling performances by a BSE debutant in recent years.
“Many will agree that in the short term, Choppies has risen too high, too far and is trading at a premium,” Motswedi Securities’ analyst, Garry Juma told Mmegi Business yesterday.
“When investors make decisions about investing, they look at the long term plans of the company and if we look at all the numbers, in five years investors are still seeing value. They are seeing that there is further potential, mainly from the expansion into South Africa and Zimbabwe, not discounting that Choppies is the biggest retailer in Botswana.”
Choppies’ management recently revealed plans to grow the retail brand regionally, while entrenching presence in existing markets.
For January, the sole losing counter on the BSE was Barclays, which shed 4.4 percent. Barclays is the fourth biggest entity on the BSE’s main index.
It was among the local bourse’s poor performers last year when it lost 16.2%.
“The below par performance at the bank has not excited investors,” Juma said, on Barclays’ recent woes.
“They were expecting more from Barclays in terms of performance. Also, the leadership vacuum with the bank going for some months without a substantive MD, did not help matters.
The recent profit warning was generally expected by the market and did not come as a shock.”
As part of its BSE disclosure obligations, Barclays told shareholders last week that its final results for the year ended December 31, 2013 would be “materially lower” than those reported in the corresponding period.
However, Juma expressed confidence that the country’s second largest bank would shake off its recent troubles.
“With the coming on board of the new MD, 2014 could be a turnaround year for the bank,” the Motswedi Securities analyst said.
“We expect good fortunes to come about this year and going forward. We do have faith in the bank’s ability to turn around and come back to winning ways.”
The BSE’s main index gained 4.6 percent in January, following a sound performance in 2013 where it posted returns of 20.2%, beating several regional peers including the Johannesburg Stock Exchange.
“I think it was a fair performance because in January we don’t expect too much volume as it is after the holidays and also because most investors will be waiting for the reporting season before taking positions.
That was quite a fair performance, considering the time of the year,” Juma said.