BSE in the red as blue chips soften

Isaac Pinielo | Friday July 8, 2016 15:41

 

Garry Juma of Motswedi Securities indicated that this is in sharp contrast to the 11.6% gain during the same period in 2015.

He revealed that four of the large cap counters; Letshego, Choppies, First National Bank Botswana (FNBB) and Standard Chartered Bank, whose shares dominate the domestic board, went down by 14.1%, 9.1%, 11% and 27.7% respectively.

“Standard Chartered has been on a losing end following weaker than expected financial results and is now trading on its 52-week low,” Juma said. He added that the bank has wiped off P1.3 billion of its market cap from P3.7 billion as at June 30, 2015 to P2.4 billion as at June 30, 2016.

Although FNBB has been resilient and able to grow its non-interest income, Juma said the low interest rate environment has been a headache for the bank, noting that its year-to-date negative performance is largely in line with expectations.

For Choppies, he said after exciting investors by rising all the way to P5.50, the retail giants succumbed to profit-taking as some investors cashed-in on their recent gains.

“The stock however, is still much sought-after as investors are excited about its aggressive expansion mode into the rest of Africa,” he said.

In terms of volumes, Juma said the year so far has been exciting with new records being met. Property loan stock company, New African Properties (NAP) traded P457 million shares on June 15, representing 26% of its market cap.

Juma said this has never happened before in the history of the BSE, adding that it shows that the local bourse is getting better day-by-day when it comes to liquidity and volumes.

“Liquidity wise the market has improved, while performance wise the market is in the red. However, this is normal in any market as investors re-evaluate their valuations and holdings,” he said.

The best performing counters in the six months to date include BOD – 146%, Cresta – 13.1%, NAP – 10.6%, BIHL – 9.3%, BTCL – nine percent and Chobe – 8.4%.