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BSE’s top gainers and losers of the year

The Botswana Stock Exchange’s benchmark index is at its lowest levels last seen two years ago as investors favourites crumble while small cap stocks punch above their weight. The BSE’s domestic company index is down by 11.63%, a stark contrast to 2015 when then stock tracking index appreciated by 11.65%. We take a look at the top gainers and losers.


The DCI which comprises of 21 listed local companies on the main domestic counter and 2 on the venture capital board is a market weighted index. That means it is sensitive to the performance of companies with large market capital value.  In 2015, the share prices of 16 companies appreciated compared to 12 companies this year. It has turned out to be the most frustrating year for investors: the local interest rates are at their lowest in over 23 years, inflation rates for most of the year has been bubbling under the central bank’s 3-6% medium term range, while the economy has been sluggish with increasing job losses across the sectors.


When the economy is under duress, analysts say the markets will be the first to reflect those cracks. The decline of the DCI hence comes as little surprise given the prevailing economic circumstances. Listed companies annual reports have been characterised by leading terms such as “tough trading conditions”, “stagnated wages”, “weak economic growth”, and “increasing regulatory controls”.

 

The DCI’s decline this year serves as an example why investors are taught why it is never a good idea to put your eggs in one basket. Some sectors have been hit the hardest, resulting in negative and low returns for investors. However not all was lost as some sectors proved their resilience in the face of headwinds.


TOP GAINERS
Cresta-Up by 19.62%
The company has recently been in the news for the wrong reasons as the company found itself in a financial scandal that led to the dismissal of the Chief Financial Officer and the resignation of the Managing Director. Nonetheless the tourism and leisure company has outperformed domestic listed companies. The profits look good and the company is optimistic about future demand as it expands to top tourist destinations like Maun.

 

The company must be chuffed by the spotlight the country is receiving following the release of the United Kingdom film which depicts an actual love and political story of the founding president. It’s expected that the movie will arouse the curiosity of frequent travellers to come see the country where the film was shot.


Botswana Insurance Holdings Limited- 15.46%
Under the leadership of Catherine Lesetedi-Letegele, the financial services behemoth with three subsidiaries that spans the insurance and investment management sector has been a consistent performer throughout the year. The company has held its own in a sector that faces enormous challenges from intense competition, stagnated wages, falling premiums and increased claims from retrenchments. While analysts are closely monitoring the company’s stock, investors are cheering them on, buoyed by the company’s expansion plan.


The group took bold steps in increasing its product mix; from acquisitions to brokering deals with banks, tapping into bancassurance as well as looking at regional expansions. BIHL is a financial services titan originally established in 1975.BIHL has been listed on the Botswana Stock Exchange since 1991 and is the holding company for three subsidiaries (Botswana Insurance Fund Management, Botswana Life Insurance Ltd and Legal Guard) and holds a stake in two associate companies; Letshego Holdings and Funeral Service Group as well as a 21.5% stake in Nico holdings in Malawi.


Engen-Up by 15.15%
A surprise performance from the stock with a market valuation of P1.5 billion that really gets mentioned with the BSE’s blue chip stocks. What impresses the most about this stock is that it began the year down at -10%, dragged down by concern over oil prices which were also at their lowest from 2015 to early 2016. However the stock remained solid and pulled spectacular move when its share price started rising in line with improved market sentiments as oil prices begun to rise.


Chobe Holdings- Up by 13.23%
This tourism listed outfit is the second best performing stock in the tourism sector. The company ended the year with impressive financials: revenue was up by 33% and profits before tax increased by 45%. With its luxury lodges, the group will benefit from increased tourism activities. Through its wholly owned subsidiaries, Chobe Holdings Limited owns and operates ten eco-tourism lodges and camps on leased land in Northern Botswana and the Caprivi Strip in Namibia with a combined capacity of 290 beds under the brands Desert & Delta Safaris and Ker & Downey Botswana. Safari Air, a wholly owned air charter operator, provides air transport services to the group's camps and lodges.

 

Desert and Delta Safaris (SA) (Pty) Ltd, another wholly owned subsidiary operating in South Africa, provides reservation services to the group. This year, the group, through its wholly owned subsidiary North West Air (Pty) Ltd, acquired Air Charter Botswana (Pty) Ltd’s aircraft maintenance operation at Maun International Airport.


G4s- Up by 12.70%
Here is another company that began the year on a back foot following a dismal stock performance in 2015. Michael Kampani, G4s Managing Director, is leaving a happy man after he steered the group to profitability since he joined it in 2013. Under his leadership, G4s has focused on its core services as well as expanding its product mix. The stock market has taken note of his stellar performance as evidenced by the company’s share price appreciation.


Barclays Bank Botswana- Up by 12.22%
The bank this year was in its element, churning out new products and services and delivering impressive financial results. It is not a surprise that investors have been rallying behind the company which often touts its 5 year transformation strategy as something to reckon with. Indeed, the results show that the strategy is having some positive results.


The bank which seeks to be the leading bank in Botswana and your bank of choice doubled its profit in its interim results for the year. The second largest listed bank becomes the only one in the banking sector that has delivered capital gains to shareholders so far this year. With most financial institutions under pressure from the prevailing tough conditions, Barclays seems to be an exception to the rule as investors rally behind it.

NEW AFRICAN PROPERTIES- Up by 10.94%
This property listed stock deserves a special mention that extends beyond its exploits in the property market. Not only did it outperform property listed stocks, it also broke records on the BSE after the single biggest day trade in the history of the BSE after the company traded 26% of its issued capital worth P457.3 million. This year’s performance extends the gains the company enjoyed last year as it delivered 22%.


NAP was listed on the BSE in 2011, with a total of 604 397 124 issued units. The largest unit holder is Cash Bazaar Holdings (Pty) Ltd with 79.3 percent stake. NAP owns properties such as Riverwalk Mall, Riverwalk Plaza and Kagiso Mall in Gaborone, Mafenyatlala Mall in Molepolole, Kasane Mall and Mokoro Centre in Maun. The portfolio comprises primarily of prime retail sites with  a strong tenant base, including Pick ‘n Pay, Spar, Choppies, Mr Price, Woolworths, Pep, Cashbuild, Furnmat, CB Stores, Ackermans, Cape Union Mart, Exclusive Books, FNB, Hi-Fi Corporation, Home Corp, Incredible Connection, Jet, KFC, Nando's, New Capitol Cinema, Mugg & Bean, JB Sports, Truworths and many others.

TOP LOSERS
Choppies-Down by 49.77%
The retail giant’s stock has been pummelled in the stock market, causing the biggest upset of the year as far as stocks are concerned. Choppies is a leading retailer in the fast moving consumable goods industry, targeting low-income to middle class buyers and the company has been doing well for the past 20 years, growing in leaps and bounds. The dual listed company, both in the BSE and Johannesburg Stock Exchange, has been pursuing regional expansions in the last two years. The company’s profit after tax nearly halved due to costs associated with the expansion.


What has been particularly worrying investors is that the expansion plans are yet to bring results. The South African and Zimbabwean Stores are still not making profits profits. Choppies faces other myriad challenges as its core customers’ disposable income diminishes through retrenchments while in Zimbabwe the recently rolled out bond notes will have an impact on the retailers operations.However, Ram Ottapathu led Choppies surprised many when it launched its own clothing line with its hyper stores. This move was seen in a positive light as it added a new revenue stream.


Furnmart- Down by 35.77%
This player also belongs to the retail and wholesaling sector that has been dragged down by economic factors. The Group continues to trade steadily in an ever more challenging environment. Drought conditions, currency weakness, high unemployment, an increase in retrenchments and the over-indebtedness of customers, continue to plague the region.

 

Low commodity prices on world markets and the slowdown in the Chinese economy have hampered growth in the countries in which Furnmart trades. The group says continued trading losses, a weakening economy, US Dollar-based rentals and a volatile currency have culminated in management’s decision to cease trading in Zambia


Furthermore, regulators continue to introduce burdensome restrictions and administrative processes on consumer credit providers, in an attempt to protect consumers from risky or unfair exposure.

Standard Chartered Bank Botswana- Down by 30.80%
The bank popularly known as Stanchart has extended its losses to 2016. The bank ended 2015 with a share price depreciation of about 11% and took the biggest fall this year. The financial sector, particularly banking, lists low interest rates, stagnated wages, unemployment and retrenchments as factors that have greatly impacted their operations. The bank’s 2015 end of year profit went down by 87% while the latest interim results reflect a decline in profits.


Stanchart was the first bank to publicly admit to its large exposure to the BCL Group which is under provisional liquidation. While the stock is being battered, the Moatlhodi Lekakau led bank is busy at work trying to turn around its fortunes. It has increased its bancassurance offerings and recently opened a digital bank branch at the country’s biggest airport.


FIRST NATIONAL BANK BOTSWANA- Down by 22.51%
FNBB is the largest bank in the country both by market value, industry profits and assets. This giant has been weakening since 2015 on the pressure of enhanced competition, the recently lifted moratorium on bank charges, low interest rates and limited spending power in the economy.
Steven Bogatsu finds himself in charge of a bank that recently reported its lowest profit in two years, continuing the trend of declining profits in the banking sector. In efforts to lure customers and get them to spend, the bank has introduced a number of initiatives such as smart devices scheme and ebucks rewards program. The bank has also bolstered its newly created insurance division, striking deals with BIHL, the country’s leading insurer.


Letshego- Down by 20%
This financial giant has made its fortunes from micro-lending, with its strong customer base made up of government workers and state owned enterprises. In the stock market, the company tops the charts of domestic companies in terms of volume and value of trades. Simply put, Letshego stock is the most liquid, exchanging hands quickly and easily. This could account for the stock’s decline this year.


The company which breached the P1 billion mark in revenue for the year ended 2015, released interim results for 2016 which showed declining profit. However the group says results show satisfactory growth in an environment of depreciating exchange rates, higher inflation and interest rates and lower economic activity in most of the markets in which Letshego operates.


In its 2015 annual report, Letshego says it will continue to drive its inclusive financial services strategy and to strengthen its operations through investment in people, technology and strategic partnerships. Moreover, the group’s Board of Directors is confident that the Pan African financial services titan is well positioned to benefit from the growing markets in which it is active and views inorganic expansion via strategic acquisitions as important to the acceleration of Letshego’s strategy.

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No end in sight for Nam, Botswana borderline feud

27th July 2021
Namibian-report

Despite the President Dr Mokgweetsi Masisi and his Namibian counterpart, Hage Geingob giving an impression that the borderline security disputes are a thing of the past and that diplomatic ties remain tight, fresh developments from Namibia suggest otherwise, following Geingod’s close confidante’s attack on Botswana and its army.

Giving a Zambezi region state of the affairs last week, a Geingob-appointed governor of Zambezi region, Colonel Lawrence Ampofu, a retired Colonel in the Namibian Defence Force, former plan combatant during the liberation struggle of Namibia, in a written speech, charged at the BDF and condemned their killings of the Namibians as unacceptable.

“The security situation within our borders remains calm. The incidence of the Botswana Defence Force shootings and wanton killings on the Nchindo Brothers on 05 November 2020 and other 37 Namibian lives lost since independence remain a serious challenge with our neighbor, Botswana.

Our residents living along the Chobe, Linyanti and Kwandu rivers are living under constant threats, harassment, fear, intimidation and killings and such activities are condemned and not acceptable,” he said under the safety and security title.

The attack suggests that Namibia has not bought Botswana’s story. Ampofu was part of the entourage that accompanied Geingob to the three Nchindo brothers and their cousin who were gunned down by the BDF, and is reported to be privy to the details of the unpublished Botswana-Namibia joint investigations report about the killings as a governor or political head of the region which has eight electoral constituencies.

The report contains the sensitive details of how the three Namibians referred as poachers by the BDF – and Fisherman by the Namibian government were gunned down on 5 November last year along the Chobe River.  They were Tommy (48), Martin (40) and Wamunyima Nchindo (36), and their cousin Sinvula Muyeme (44).

His views are not really in contrast to his President’s views who also described the BDF as trigger happy in a scripted report to his cabinet.

The Zambezi region is located in the extreme north east part of Namibia and covers a total of 14,667.6 square kilometres. “We share borders with Angola, Zambia to the north, Zimbabwe to the east and Botswana to the South,” he said.

Sampofu was first appointed governor of the former Caprive Region in 2010 by the former Namibian president, Hifikepunye Pohamba and was reappointed as Zambezi governor by President Dr.Hage Geingob in 2015, a term running to 2025.

37 Namibia residents killed by Botswana army so far

Sampofu is a man who continues to insist that Botswana has killed 37 residents of his region. A video posted by the Namibian Broadcasting Corporation (NBC) shows him alleging that at least 37 Namibians were killed by the BDF, after he met with the community at Impalila.

“It is true, the BDF started long ago. As we speak 37 lives have been lost here in Impalila along the Chobe river going to Linyanti and Kwado rivers up to Lizauli. All those families lost their loved ones,” Ampofu said in the video posted by NBC.

It is not known how the BDF, which has maintained their position that the Namibians were engaging in illegal activities of poaching, treats the constant attacks by the Namibian authorities, but they have repeatedly vowed to continue protecting the country’s sovereignty and natural resources.

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Masisi gives KBL the “middle finger”

27th July 2021
President Masisi

Botswana’s premier brewer and leading distributor of beer, Kgalagadi Breweries Limited (KBL), this month dragged the government of Botswana to court after President Mokgweetsi Masisi imposed an alcohol ban with immediate effect. KBL labelled the decision as unjustifiable, irrational and that it overrides the rights that are enshrined in the constitution.

This week, Masisi through attorneys representing the government disparaged the case in his written affidavit of KBL’s application, referring to it as frivolous and that it ought to be dismissed with costs on a punitive scale.

In his court papers, Masisi reminded KBL that Botswana is a Republic whose laws find validity from the constitution, and in terms of Section 17 of the constitution the President is empowered to declare a State of Emergency and that it is a common cause that Botswana is under such state.

“It is common course that there is in existence emergency powers (Covid-19) Regulations 2020 as amended from time to time which is solely designed to regulate the Covid-19 pandemic,” he said.

Masisi pointed out that he denies that the application before Court is proper such as to challenge the lawfulness and validity of a regulation made and a notice published in the exercise of a legislative function in accordance with the Emergency Powers Act which empowers the President to make regulations as appear to him to be necessary and expedient for securing public safety.

Furthermore, the President revealed that the decision to ban alcohol sales was not arrived at willy-nilly, but rather that there had been careful considerations that the risks posed by Covid-19 had increased and therefore it was expedient and necessary to suspend all liquor licenses.

Moreover, Masisi denied that the decision to reinstate the ban should be made by the Director of Health Services as indicated by KBL in their nature of the application, “the Director is to cause the notice to be published in the Gazette after consultation with the President.”

Masisi indicated that the role of the Director of Health Services is to publish a regulation made by the President.

He further, reminded KBL that the power to make regulations in a State of Public Emergency in accordance with the EPA lies with the President, “such power includes the amendment of any enactment, suspending the operation of any enactment or modification of an enactment.”

According to Masisi, his decision to ban alcohol sales was based on evidence provided by the Director of Health Services who indicated to him that there was a sudden spike in the transmission of the Covid-19 virus following the reinstatement of liquor licenses.

Another piece of advice tendered by the Director of Health to Masisi was that bars and other liquor outlets were some of the major hotspots in the sense of such being high-risk areas at which the virus spread rapidly.

“Alcohol was one of the major causes of non-compliance with the health protocols that were put in place to control the spread of the Covid-19 virus. Further, there was an indication that more arrests were made on people failing to adhere to Covid-19 protocols more particularly at places where there were gatherings,” he contended.

He pointed out that therefore, it was expedient and or necessary to preserve lives and to reduce the risks of transmissions of the virus to reinstate the suspension of liquor licenses.

Moreover, the President says that it must be noted that he avers that the Director of Health Services is a credible source on matters of public health of which he also accordingly gave due weight to the Director’s advice on deciding to reinstate the ban through the impugned notice.

“I am aware and was always aware at the time of promulgating the regulation complained of that it shall negatively affect some sectors of the economy. However, after due consideration and receipt of advice, I decided to give priority to the safety and health of the nation,” Masisi said.

He presaged KBL that it would not be prudent and in the best interest of the nation to ignore a health emergency such as Covid-19 and gave preference to trading and making of profits by the applicant. “The results would only be catastrophic to the extent that when we emerge from the scourge we would be left with a depleted and ailing nation from Covid-19 and its side effects.”

Furthermore, his written affidavit further pointed out that the decision to reinstate the ban on alcohol was taken notwithstanding understanding and appreciation of the economic hardships that would befall the country.

However, he said he deliberately made the decision based on the evidence provided to him by the Director of Health, whose evidence he believes to be credible to give public/safety and health priority over economic considerations in some sectors.

In making the decision, Masisi states that he was and considered different options including allowing for sale of alcohol consumption off premises, however the evidence he had been provided with suggested that such other alternatives would not achieve the overall objective of securing public safety and health by reducing the risk of the spread of the virus.

“By the time I imposed the ban, alcohol was already being sold for consumption off-premises. This did not work. The information provided to me by the Director and the Presidential Task-Force team demonstrated that consumers purchased alcohol and then loitered and consumed it within the peripheries of bars and other liquor outlets,” he said.

Attached to the affidavit as emphasis, were photographs and videos of Gaborone West, Phase 4 in mid-June 2021, which he explains circulated on social media and was brought to his attention.

“I need not say much about the photos as they depict a crowd exceeding 50 gathered at the parking area of a bar. There is little or no regard to Covid-19 protocols. It was clear to me and my advisors, including the Director of Health Services and members of the Presidential Task-Force team that the total ban of alcohol was necessary to manage the risk of increase in infections, to understand what seems to have led to an increase in the risk of infection when alcohol is present I was advised by the Presidential Task-Force team that scientifically there has been evidence that alcohol narrows physical distance,” he argued.

Masisi says that allegations made by KBL are serious allegations of infringement of fundamental rights yet they fail to state how imposition and reinstatement of the suspension of liquor licenses out of necessity and expediency of the health of the nation infringes on the rights as alleged.

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Gov’t gives parallel statements on COVAX

27th July 2021
COVAX---lelatisitswe

In  an embarrassing turn of events that depicts disintegration in government communication on the fight against COVID-19, President Mokgweetsi Masisi and Assistant Minister of Health & Wellness, Sethomo Lelatisitswe gave two conflicting statements on the same matter, same day, just minutes apart.

The Commander-in-Chef told health practitioners and residents in Ramotswa that the COVAX facility has scammed African countries after billions were paid in a crowd funding effort to procure COVID-19 vaccines in bulk.

“We have pumped money as developing countries of the African continent into the COVAX Facility but the returns were not satisfactory, they cheated us,” the President said in Ramotswa.

According to President Masisi, the COVAX facility Vaccine only came in bits and pieces, frustrating the continent ‘s head immunity targets amid rapidly spreading Delta Variant which is currently reversing all progress made by Africa in containing the contagious virus.

“What we are getting is very small portions of the vaccine, they keep telling us that there is shortage of supply, this is not fair, but we have paid in advance, however what can we do, we have no choice but to spend more  money and look for other avenues of securing other available vaccines,” he said.

Meanwhile in Gaborone, Assistant Minister of Health and Wellness told Parliament that vaccine from COVAX facility is anchoring Botswana’s vaccination program.

“I am not aware of such information that COVAX facility is not delivering as expected, we are actually bolstered by COVAX facility in this country,” he said responding to a question from Mahalapye West Member of Parliament David Tshere who is also Chairman of Parliament Committee On Health and HIV/AIDS.

“We have received doses as ordered from the COVAX facility, and we are still receiving more, I have not seen that information which is purported to have been revealed by the President, unless its new information, we as the Ministry we are not aware of any frustrations by the COVAX facility,” he said.

COVAX is co-led by the Coalition for Epidemic Preparedness Innovations (CEPI), Gavi and the World Health Organization (WHO), alongside key delivery partner UNICEF.

Its aim is to accelerate the development and manufacture of COVID-19 vaccines, and to guarantee fair and equitable access for every country in the world.

The facility is a global coalition that works to ensure fair and equitable access of COVID-19 vaccines around the world. So far, 190 countries have joined the COVAX initiative, including all 22 countries in the Eastern Mediterranean Region.

The COVAX Facility aims to have 2 billion doses of COVID-19 vaccines available for distribution across the globe by the end of 2021, targeting those most at risk (e.g. frontline health workers) and most vulnerable severe diseases and death (e.g. elderly and people with co-morbidities).

On other vaccination issues President Masisi revealed, still in Greater Gaborone vaccination centre visits, that Botswana has placed orders with Pfizer, a United States vaccine producer noting that they have promised to deliver next year.

Meanwhile, government kick-started phase two of the Covid-19 vaccination program this week, opening up for ages between 30 and 54.

President Masisi revealed that this was done because some elderly were reluctant to be inculcated.

“We can’t take forever trying to convince people to take vaccine, we moved to the next age segments because we cannot afford to have vaccines-which are already in shortage supply to just lie there,” he said.

On Friday, Ministry of Health revealed that it was receiving large numbers of people below the age of 55 lining up to be vaccinated.

In a statement the Ministry of Health said it, “acknowledges the huge turnout that marked the commencement of the Phase two COVID-19 vaccination program”.

Given this high turnout, especially in the Greater Gaborone region, the ministry announced an extension of operation hours in order to serve the huge crowds that had come for vaccination.

Of the nearly 85 000 doses that were being doled across the country as first doses, the majority of the Greater Gaborone vaccination sites were already getting depleted by 1800hrs on 22 July 2021.

As a result of this development, the ministry took a decision to discontinue the extended hours of operation announced yesterday for vaccination sites in Gaborone.

This means that vaccination sites in Gaborone and elsewhere in the country which still have some vaccines, will offer them in the normal working hours and days of the week.

The Ministry says it appreciates the great desire to be vaccinated shown by thousands of citizens and residents of this country and wishes to assure them that it will continue to expedite their vaccination every time vaccines become available. As has been communicated in various fora, more vaccines are expected in August 2021.

As at July 2021, Botswana has so far received 62, 400 doses of AstraZeneca/COVISHIELD bought through the Covax facility, 30,000 doses of AstraZeneca vaccine donated by the Republic of India, 19, 890 doses of the Pfizer vaccine bought through the COVAX facility, 200, 000 doses of the Sinovac vaccine, donated by the Peoples Republic of China and another 200, 000 doses of the Sinovac vaccine bought through bilateral negotiations with Sinovac company in China.

“We encourage Batswana to remain hopeful that although it’s taking longer than anticipated, enough COVID-19 vaccines will eventually arrive in our country. We urge them to always strictly abide by all COVID-19 protocols so that they protect themselves and others from this deadly virus,” the ministry said.

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