P9 billion wiped off foreign board at BSE

According to a Capital Securities' November 2008 BSE report, the P9 billion that has been wiped off the board since the opening of the year is 'potentially more damaging' than meets the eye.

The report says in the month of November, of the eight Botswana mining-related stocks, three improved on their previous four-week performance, four slowed, while one was steady. The market cap of the mining-related stocks was P12,995 million. Over the last four weeks it had dropped 2.7 percent, over 52 weeks it is down 41.5 percent. Anglo American, also dual-listed, was up 26.0 percent over the four-week period.

Trade in the Botswana mining stocks was 2,800,511 shares over the four weeks, or
0.20 percent of shares issued. Over 52 weeks it has been 11,895,885 shares, or 0.84 percent.

'The Botswana venture capital mining stocks suffered from a Catch 22 situation,' the report said. 'Investors used to the risks of putting money into exploration companies, shied away from the added risks of a commodity slowdown exacerbated by the financial crisis.'

While politicians are busy bailing out international banks and are unable and understandably unwilling to put a timeframe on when they might see positive results of their efforts, streetwise commodity analysts are talking openly of up to five years before their markets, China in particular, will recover.

Meanwhile, the BSE domestic board closed the four weeks ended November 28 at 7820.41 points, down 6.4 percent over the period. It is down 12.6 percent over the last 52 weeks.

The market capitalisation of the board was P30, 276m. It was P34, 515m 52 weeks ago, P32, 696m at the beginning of the year. Of the 20 domestic counters, 12 traded over the period; one closed heavier, 15 lost weight and four closed unchanged.

Capital Securities said the bourse is set to fall far short of its 36 percent positive showing over 2007. The first five months of the year recorded consistent losses to a domestic index low of 6908.33.

'A subsequent rally brought a wave of optimism. After four months of weekly gains, the index recovered to 8630.26, but then the current losing streak set in. The year to date performance of the domestic board is a 7.2 percent loss,' the report said.

The fall in domestic stocks was overwhelmingly attributable to the international credit crisis, it added. The market capitalisation of the Botswana bourse is 80 percent its financial sector, of which 62 points represent subsidiaries of international banks, 8.5 points a regional insurer and 10 points a domestic lending institution.

All financial stocks continued to record losses over November, although the banks appreciably slowed their rates of loss while both insurer and lender increased theirs.
Trade on the domestic board over in November was 11,478,244 shares, or 0.54 percent of the float of shares free to trade on the market, which is approximately 37 percent of the total capitalisation of all shares in issue. Trade over the past 52 weeks has been 153,328,025 shares or 7.25 percent of the float.

Four of the listings on the domestic board are of property- related stocks. Three are development companies, one a building supplies manufacturer.

There is no separate index of property stocks, but their total market capitalisation at the November 28 close was P937 million. It had grown 0.8 percent over the four-weeks, over 52 weeks it has lost 6.3 percent. Of the four stocks, one closed heavier over the four weeks, one lost weight, while two were unchanged.

Property counters traded a total of 1,048,199 shares, or 0.52 percent of the float of property company shares, which is approximately 83 percent of property shares issued. Over 52 weeks, they have traded 12,266,665 shares or 6.06 percent of the float.