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Choppies on the rebound

While there is rife speculation on the abrupt drop of giant retailer Choppies shares few days ago, the Chief Executive Officer of Botswana Stock Exchange Limited(BSEL) Thapelo Tsheole has seen the bright side. Choppies is estimated to have lost about P1.7 billion in value following the drop in share price.

When addressing journalists just after BSEL’s 5th Bell Opening Ceremony, Tsheole said there was a lot of interest by investors on Choppies and many were demanding information, a positive thing according to him. Choppies’s fall in share price has also been marred by a lot of speculation and controversy with some alleging that the increase in stock is because of the entity’s allegations of money laundering and fraud. Tsheole said they saw the allegations in media platforms and remain just that, “allegations will remain allegations”. Meanwhile experts believe the fall of Choppies emanated to the entity’s failure to release financial results.

 “The interesting thing is that at least now we are seeing a lot of activism among the shareholders which is what we have always encourage. A lot of people sometimes who own shares have a tendency to sit back thinking that the stock exchange is there to do something for them,” said Tsheole.

Tsheole revealed that even though they are practically owners of entities, investors tend to only ask questions when share prices fall, like the current case of Choppies. The BSEL said some even contact him but mistake BSEL’s role by asking the stock exchange “to save Choppies investors” especially when share prices fall drastically like in the case of Choppies. Some even want BSEL to investigate Choppies money laundering, according to Tsheole, the role to investigate such financial crimes rests with serious crime units or relevant authorities that deals with such lawlessness.

“Our role is not to investigate fraud or money laundering but to facilitate that listed entities complies in terms of the listing rules that any material information that could potentially affect the value of the shares is out to the investors,” said Tsheole.
Tsheole also explained that BSEL does not control share prices but only offers a platform for trading shares.

Also to provide sufficient information on a listed entity to avoid some people who would use privilege information to their advantage when taking investment decisions, said Tsheole. The BSEL chief also stated that the stock broker’s role is to ensure that everyone has equal opportunities to sufficient, quality or privilege information when taking any decision to trade.

THE DOUBLE EDGED SWORD OF FALL OF PRICE

Tsheole explained to journalists this week that the drop in shares of Choppies should not only be seen in the negative as some would see the positives. He said in the realities of the market or the game of stock exchanges, when prices fall some sees hope and buy shares while the prices are still low while others see gloom and walks out of.

Tsheole also said the speculation of Choppies going down because it is involved in controversies may be a tact used by those who wish to see the retailer’s price go down so that they can take it by hostile takeover. He hinted that probably Choppies has many rivals as it traverses Southern Africa to mark its footprint, giving completion to older retailers who may come with other tactics of taking the local supermarket down.

While he confirmed that they are currently giving Choppies a hard time to release share and that they are also hitting it with charges, Tsheole lauded the giant retailer that “it is a credible company and a big brand and it has expanded into Africa and giving those big South African companies competition.”

Tsheole also said Batswana are in a panic mode maybe because of their familiarity with Choppies as the common local retailer, but fall of shares have happened many times in the history of stock markets. He gave example of giant social network Facebook whose stock fell drastically earlier this month due to involvement in a ‘data theft’ scandal.  He said it is the reality of the game that some lose badly in the stock market while some see big opportunities.

THE SHARE PRICE REBOUND

Choppies’ share price fell as much as 85% on Tuesday morning after the Botswana-based food retailer said it would miss a deadline to publish its financial results for the year to June. The group, which is reportedly in a dispute about its shareholding structure in Zimbabwe, said "a number of matters requiring the attention of the board and management, which may impact materially on the results, are being considered.

"The possible reporting impacts of these matters have not yet been finally and fully determined," the company said in a statement, adding it would miss the reporting deadline of September 30 2018. The group said its profit after tax would fall by at least 20%, though it could not yet quantify the decline. Choppies’ shares closed 73% lower on the Botswana Stock Exchange and 72% lower at 46c on the JSE.

The group, which operates across Southern and East Africa, listed on the JSE in May 2015 at R4.90 per share. The Choppies shares were trading again on wednesady and were on a rebound, trading at 65thebe after dropping to 40 thebe on Tuesday.

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Banking on Your Terms: Exploring the World of Self-Service Banking

23rd February 2024

In today’s digital age, banking is no longer just about visiting a branch during business hours. It’s about putting you, the customer, in the driver’s seat of your financial journey. But what exactly is self-service banking, and how do you stand to benefit from it as a customer?

Self-service banking is all about giving you the power to manage your finances on your terms. Whether you want to check your account balance at midnight, transfer money while on vacation, or deposit cash without waiting in line, self-service banking makes it possible. It’s like having a virtual branch at your fingertips, ready to assist you 24/7.

This shift towards self-service banking was catalyzed by various factors but it became easily accessible and accepted during the COVID-19 pandemic. People of all ages found themselves turning to digital channels out of necessity, and they discovered the freedom and flexibility it offers.

Anyone with a bank account and access to the internet or a smartphone can now bank anywhere and anytime. Whether you’re a tech-savvy millennial or someone who’s less comfortable with technology, you as the customer have the opportunity to manage your finances independently through online banking portal or downloading your bank’s mobile app. These platforms are designed to be user-friendly, with features like biometric authentication to ensure your transactions are secure.

Speaking of security, you might wonder how safe self-service banking really is. Banks invest heavily in encryption and other security measures to protect your information. In addition to that, features like real-time fraud detection and AI-powered risk management add an extra layer of protection.

Now, you might be thinking, “What’s the catch? Does self-service banking come with a cost?” The good news is that for the most part, it’s free. Banks offer these digital services as part of their commitment to customer satisfaction. However, some transactions, like wire transfers or expedited bill payments, may incur a small service fee.

At Bank Gaborone, our electronic channels offer a plethora of services around the clock to cater to your banking requirements. This includes our Mobile App, which doesn’t require data access for Orange and Mascom users. We also have e-Pula Internet Banking portal, available at https://www.bankgaborone.co.bw as well as Tobetsa Mobile Banking which is accessible via *187*247#. Our ATMs also offer the flexibility of allowing you to deposit, withdraw cash, and more.

With self-service banking, you have the reins of your financial affairs, accessible from the comfort of your home, workplace, or while you’re on the move. So why wait? Take control of your finances today with self-service banking.

Duduetsang Chappelle-Molloy is Head: Marketing and Corporate Communication Services

 

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Botswana records over P6 billion trade deficit

7th February 2024

Botswana has recently recorded a significant trade deficit of over P6 billion. This trade deficit, which occurred in November 2023, follows another deficit of P4.7 billion recorded in October of the same year. These figures, released by Statistics Botswana, highlight a decline in export revenues as the main cause of the trade deficit.

In November 2023, Botswana’s total export revenues amounted to P2.9 billion, a decrease of 24.3 percent from the previous month. Diamonds, a major contributor to Botswana’s exports, experienced a significant decline of 44.1 percent during this period. This decline in diamond exports played a significant role in the overall decrease in export revenues. However, diamonds still remained the leading export commodity group, contributing 44.2 percent to export revenues. Copper and Machinery & Electrical Equipment followed, contributing 25.8 percent and 10.1 percent, respectively.

Asia emerged as the leading export market for Botswana, receiving exports worth P1.18 billion in November 2023. The United Arab Emirates, China, and Hong Kong were the top destinations within Asia, receiving 18.6 percent, 14.2 percent, and 3.8 percent of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia.

The Southern African Customs Union (SACU) received Botswana’s exports worth P685.7 million, with South Africa being the main recipient within SACU. The European Union (EU) received exports worth P463.2 million, primarily through Belgium. Australia received exports worth P290 million, while the United States received exports valued at P69.6 million, mostly composed of diamonds.

On the import side, Botswana imported goods worth P9.5 billion in November 2023, representing an increase of 11.2 percent from the previous month. The increase in imports was mainly driven by a rise in Diamonds and Chemicals & Rubber Products imports. Diamonds contributed 23.3 percent to total imports, followed by Fuel and Food, Beverages & Tobacco at 19.4 percent and 15.0 percent, respectively.

The SACU region was the top supplier of imports to Botswana, accounting for 77.7 percent of total imports. South Africa contributed the largest share at 57.2 percent, followed by Namibia at 20.0 percent. Imports from Asia accounted for 9.8 percent of total imports, with Diamonds, Machinery & Electrical Equipment, and Chemicals & Rubber Products being the major commodity groups imported. The EU supplied Botswana with imports worth 3.2 percent of total imports, primarily in the form of Machinery & Electrical Equipment, Diamonds, and Chemicals & Rubber Products.

Botswana’s recent trade deficit of over P6 billion highlights a decline in export revenues, particularly in the diamond sector. While Asia remains the leading export market for Botswana, the country heavily relies on imports from the SACU region, particularly South Africa. Addressing the trade deficit will require diversification of export markets and sectors, as well as efforts to promote domestic industries and reduce reliance on imports.

 

 

 

 

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Business

Business sector optimistic about 2024

7th February 2024

The business sector in Botswana is optimistic about the year 2024, according to a recent survey conducted by the Bank of Botswana (BoB). The survey collected information from businesses in various sectors, including agriculture, mining, manufacturing, construction, and finance, among others. The results of the survey indicate that businesses expect trading conditions to improve in the first quarter of 2024 and remain favorable throughout the year.

The researchers found that firms anticipate improvements in investment, profitability, and goods and services exported in the fourth quarter of 2023 compared to the previous quarter. These expectations, combined with anticipated growth in all sectors except construction and real estate, contribute to the overall confidence in business conditions. Furthermore, businesses expect further improvements in the first quarter of 2024 and throughout the entire year.

Confidence among domestic market-oriented firms may decline slightly in the first quarter of 2024, but overall optimism is expected to improve throughout the year, consistent with the anticipated domestic economic recovery. Firms in sectors such as mining, retail, accommodation, transport, manufacturing, agriculture, and finance are driving this confidence. Export-oriented firms also show increased optimism in the first quarter of 2024 and for the entire year.

All sectors, except agriculture, which remains neutral, are optimistic about the first quarter of 2024 and the year ending in December 2024. This optimism is likely supported by government interventions to support economic activity, including the two-year Transitional National Development Plan (TNDP) and reforms aimed at improving the business environment. The anticipated improvement in profitability, goods and services exported, and business investment further contributes to the positive outlook.

Firms expect lending rates and borrowing volumes to increase in the 12-month period ending in December 2024. This increase in borrowing is consistent with the expected rise in investment, inventories, and goods and services exported. Firms anticipate that domestic economic performance will improve during this period. Domestic-oriented firms perceive access to credit from commercial banks in Botswana to be relaxed, while export-oriented firms prefer to borrow from South Africa.

During the fourth quarter of 2023, firms faced high cost pressures due to increased input costs, such as materials, utilities, and transport, resulting from supply constraints related to conflicts in Ukraine-Russia and Israel-Hamas. According to the survey report, the firms noted that cost pressures during the fourth quarter of 2023 were high, mainly attributable to increase in some input costs, such as materials, utilities, and transport arising from supply constraints related to the Ukraine-Russia and Israel-Hamas wars. “However, firms’ expectations about domestic inflation decreased, compared to the previous survey, and have remained within the Bank’s 3 – 6 percent objective range, averaging 5.4 percent for 2023 and 5.4 percent for 2024. This suggests that inflation expectations are well anchored, which is good for maintenance of price stability,” reads the survey report in part.

However, firms’ expectations about domestic inflation decreased compared to the previous survey, and inflation expectations remained within the Bank’s objective range of 3-6 percent. This suggests that inflation expectations are well anchored, which is beneficial for maintaining price stability.

In terms of challenges, most firms in the retail, accommodation, transport, manufacturing, construction, and finance sectors considered the exchange rate of the Pula to be unfavorable to their business operations. This is mainly because these firms import raw materials from South Africa and would prefer a stronger Pula against the South African rand. Additionally, firms in the retail, accommodation, transport, and mining sectors cited other challenges, including supply constraints from conflicts in Russia-Ukraine and Israel-Hamas, as well as new citizen economic empowerment policies that some firms considered unfavorable to foreign direct investment.

On the positive side, firms highlighted factors such as adequate water and electricity supply, a favorable political climate, an effective regulatory framework, the availability of skilled labor, and domestic and international demand as supportive to doing business in Botswana during the fourth quarter of 2023.

Overall, the business sector in Botswana is optimistic about the year 2024. The anticipated improvements in trading conditions, supported by government interventions and reforms, are expected to drive growth and profitability in various sectors. While challenges exist, businesses remain confident in the potential for economic recovery and expansion.

 

 

 

 

 

 

 

 

 

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