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Tough love BSE confirms missing Choppies and Wilderness

In the last two years markets regulator Botswana Stock Exchange (BSE) CEO Thapelo Tsheole did not spare any rod for any child to rot and this has seen suspension and exit of top contributors to trading activity, an affliction to the local bourse.

In its recently released BSE market status report for the last 12 months BSE regrets the continued suspension of Choppies which ran from its actual suspension in 2018 to its failure to get out of the status the whole of last year. Choppies failed to comply with BSE Listing Requirement by failing to timeously publish its audited financial statements for the year ended 30 June 2018. The suspension has been going on until further notice.

Choppies was suspended when its share price fell by 73 percent, plummeting from P1.69 to P0.40 in a single day of 28 September 2018. That fateful day the retailer market capitalization slumped from P2.2 billion to P521.5 million. Choppies, once the biggest contributor to the local bourse, was suspended when it stock was at P0.69. The Retail and Wholesaling sector, the second most traded after the property sector, contribution of 23 percent to domestic turnover in 2019 could have been more if Choppies shares were not put on the freezer by BSE.

Since joining the local bourse in January 2012 Choppies has been the best told success story, starting from a general dealer size in a small town of Lobatse then becoming a more than 200 store regional retailer giant when it listed on BSE. Choppies became a big profit making machine, making it a darling to investors with pension funds buying millions of the retailer’s shares as it continued to perform better in the market.

After demutualizing in 2019, in 2019 BSE put more teeth in the form of its BSE Listing Requirements and this has seen some companies bowing out of the bourse.  Furnmart finished its delisting in the beginning of last year and said it left the bourse because it has seen that the demands for its shares were less and they could not comply with the new BSE regulation implemented in January 2019 which authorize companies to increase shares held by the public from 20 percent to 30 percent.

Just six month before the January 2019 deadline about 23 percent of Furnmart’s shares were in public hands, meaning the increase to 30 percent would be a goose chase. The company owners said. “With the new BSE regulations, we will no longer be able to meet the requirements in 2019 (and) delisting is a natural and obvious step.”Furnmart bowed out of the bourse as one of vital players in the market trading at P0.55. The last time Furnmart share price was high was in the first quarter of 2016 at P0.85.

Once BSE star child, Wilderness Holdings Limited walked out of BSE last year offering P6.25 for its shares and it has been one of the most successful performer in the bourse since it was listed years ago. In 2018 November its share price went up to a high of P6.56 and remained constant to April 2019 until dropping to P6.30 the same year before it delisted at P6.25.

Wilderness Holdings share has been one of the investors or buyers’ favorite for years since it was in the growing tourism sector, making revenue from its sought after safaris hence boosting the company profit. Also, Wilderness has been leading top traded counters of 2019 with P282.3 million. “Two important events held in 2019 which contributed to a reduced universe of tradeable securities; the continued suspension of Choppies Limited throughout 2019 and the delisting of Wilderness Holdings Limited and Furnmart Limited during the year.

These entities have contributed significantly to trading activity in prior years owing to their size and contribution to diversity of sectors on the Exchange,” said BSE market status for the last 12 months. According to BSE, the delisting of two companies and continued suspension of Choppies have also negatively impacted domestic market capitalization which has reduced by P3.7 Billion to P38.7 Billion from P42.4 Billion in 2018.

But BSE continues to lure investors and says, “on a balance of events, to experience a continued suspension of Choppies and a delisting of two major corporates and still restore trust, confidence and investor activity has been a remarkable feat for the Exchange and the investor community.” During BSE first Opening Bell Ringing Ceremony for the markets this year recently Chairman Tebogo Masire and Tsheole talked of how last year the market was resilient when it was bad and even performed fairly better than other bourses in the region.

Investor confidence was dizzy last year as the country prepared for the most unpredictable national polls with the former president opposing his successor, most thought of the worst to happen as it is always the case in Africa. Foreign investors held on to their money and the market remain stagnant, but the local bourse was unfazed. Masire said, “the BSE has remained resilient in the midst of subdued global performance where there was generally a downturn in all regions.”

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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