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Low equity turnover during 2019 H1 – BSE

Botswana Stock Exchange Limited this week released their Market performance report for the six month period from 1st January to 30th June 2019. One of the major highlights from the Thapelo Tsheole led Exchange Market is the low figures recorded on the equity Market front.

The performance analysis in this space indicates that turnover was comparatively low with respect to trading activity and liquidity. As at 30 June 2019, the BSE has recorded a turnover of P866.9 Million from a volume of 257.4 Million shares traded. During the same period in 2018, the BSE had registered a turnover of P1, 084.7 Million and a total volume of 411.6 Million shares traded.

During this period, the top 3 traded companies in terms of value, on a year to-date basis were the currently delisting Safaris outfit Wilderness Holdings at P282.3 Million, Botswana Insurance Holdings Limited (BIHL) at P120.6 Million while local brewer Sechaba Holdings came in at P114.9 Million. In 2018 Half year 1, three companies accounted for 74.1%. For half year 2019 the three top companies combined turnover closed the six month at only 59.7% mirroring an improved contribution to turnover by companies in 2019 relative to 2018.

Of the poorly performed companies during the period under review, Standard Chartered Bank Botswana share price decreased by 50.0% followed by Tlou Energy and SeedCo which declined by 48.7% and 45.5% respectively. FNBB share price gained the most during the period, increasing by 12.2% followed by Letlole and Sechaba share prices which increased by 5.1% and 2.8% respectively. Of the 35 companies listed including the Serala OTC registered BBS Limited on the Exchange, 6 experienced a share price increase, 19 registered a share price decline and share prices of 10 companies ended the period flat.

Trading of local companies listed on Botswana Stock Exchange comparatively improved during the first half of 2019. This is depicted by Domestic Company Index (DCI)   figure of 2.9 % depreciation compared to a steeper decline of 5.2% during the same period in 2018. According to Stock Market performance report on the Foreign Company Index (FCI) front figures depreciated by 0.4% on a year to date basis in 2019 compared to a decline of 0.2% over the same period in 2018.  As at 30th June 2019, the DCI Total Return Index (DCTRI) had depreciated by 0.2%

When gauging companies on Investor contribution to equity market, figures indicates that during the first half of 2019, local companies contributed 58.7% to total turnover compared to 60.1% in the corresponding period in 2018. Furthermore local individuals contributed 4.7% of total turnover recorded during the period 1 January to 30 June 2019 in comparison to 3.5% in the corresponding period in 2018.

Trading in Exchange Traded Funds (ETF) was relatively low in the first half of 2019 compared to the same period in 2018. The value of units traded decreased in the year to date period to P62.0 Million compared to P186.9 Million in the corresponding period in 2018, whereas the number of units traded decreased from 2.0 Million units in 2018 and 0.58 Million units in 2019. “From a return perspective, the ETFs performed well in comparison to the equities.” Reads the report.

The NewGold, NewPlat and NewFunds ETFs gained 10.6%, 4.5% and 7.7% respectively.The Bond market experienced a slowdown in trading activity compared to the same period in 2018. BSE says the value of bonds traded during the year-to-date period was P523.8 Million compared to P755.7 Million traded during the same period in 2018.

At its first bond auction of 2019 on 1 March 2019, Bank of Botswana (BoB) offered additional tranches of BW013 allotting additional P137 Million, while BW014 was reopened and additional P335.0 Million allotted. The Treasury Bill was allotted an additional P350 Million. At its second auction of the year conducted on 31 May 2019,  BW007 ,BW014 , BW015 were reopened and allotted additional P150 Million  ,P227 Million  ,P100 Million respectively In addition, a Treasury Bill was reopened and issued with an additional P300.0 Million.

During this first 6 months period of 2019 Botswana Stock Exchange registered two bond listings in being the RDCP001 at P47.35 Million, and CGL001 at P128.51 Million. On the back of this  Government bonds’ re-openings and new corporate issuances, the market capitalization of listed bonds increased to P15.8 Billion compared to P14.6 Billion as at the same period in 2018.

When gauging against other strategic benchmark market BSE reports that its selected exchanges the Johannesburg Stock Exchange All Share Index and the MSCI Emerging Market Index realized positive returns during the first half of 2019, appreciating by 12.2% and 9.6% respectively. On the other hand, the SEMDEX and the DCI depreciated by 4.1% and 2.9% on a year-to-date basis respectively.

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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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