Financials buoy BSE in first quarter
Isaac Pinielo | Friday April 17, 2015 16:07
The domestic companies index (DCI) registered a 2.02 percent increase during the first quarter of 2015, closing at 9693.91 points as compared to 1.18 percent decline that was recorded in the first quarter of 2014.
Around P355 million worth of shares exchanged hands in March 2015 from P65 million in February and P137.1 million in January respectively.
However, the foreign companies index (FCI) declined by 0.41 percent compared to 0.15 percent recorded during the first quarter of 2014. Total turnover and volumes came in at P558.6 million on 154.8 million shares compared to P648.3 million on 177.7 million shares.
A research analyst at Motswedi Securities, Garry Juma said most of the large volumes were in selected counters such as First National Bank of Botswana (FNBB), Choppies, Letshego, Botswana Insurance Holdings Limited (BIHL) and Barclays Bank of Botswana as investors welcomed their good financial results, which were produced despite the tough economic environment. “It is encouraging to see most stocks especially banks releasing these positive numbers despite the tough economic environment,” he stated. Juma added that most listed banks grew their non-interest income during the 2014 full year financials and that this is notwithstanding the moratorium imposed by the Bank of Botswana (BoB). He further noted that the growth in non-interest income is exciting as it reflects local banks’ innovativeness in growing their income streams and less reliance on interest income, which is under pressure as a result of the low interest rate environment.
In terms of share price movements, he said, Sefalana was the best performer, gaining 19.2 percent during the first quarter.
“This was on the background of the release of a good set of interim results and the group’s expansion into Namibia through the acquisition of 12 Metro stores,” he said. According to Juma, the acquisition has allowed Sefalana to achieve a very significant presence in Namibia within a short space of time, and hence diversify its earnings away from the Botswana market. For the six months to 31 October 2014, the group’s revenue went up by 32 percent, while gross profit came in 14 percent higher and profit before tax jumped by 27 percent.
Barclays was the best performer, pushing on 15.9 percent as investors took advantage of the dip in the stock share price. The bank subsequently released a good set of 2014 full-year financials with profit after tax growing strongly by 16 percent and earnings per share up by 15.8 percent. The restructuring strategy seems to be gaining traction as evidenced by the 14 percent growth in non-interest income and a 24 percent decline in impairments.
Ngodya Chimbwete of Imara Capital Securities asserted that the performance of the local stock market was largely affected by the amendments made by the Botswana Public Officers Pensions Fund (BPOPF) in terms of allocation of funds to asset managers.
“This caused a period of inactivity in the market whilst the issue of allocation was being sorted,” he said. Stock Brokers Botswana analyst, Tshepo Setlhare, conceded that the index gains on the domestic board were led by Sefalana, Imara, Barclays, Chobe and RDC Properties, closing at 1100 thebe, 247 thebe, 400 thebe, 458 thebe and 221 thebe, respectively.
On the other hand, the biggest losers included G4S, Letshego, Choppies, Engen and Furnmart.