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Strong Pula boosts BSE gains

The Botswana Stock Exchange (BSE) has so far continued to impress in terms of USA dollar (USD) returns to local and foreign investors. As majority of African currencies tumble due to the rout in commodity prices amid weak demand in China, the BSE which is the sixth largest stock exchange in Africa, has returned gains of 0.91% in USD terms, thanks largely to the resilient strong pula.

According to the African Alliance weekly report, as of 26 October, the biggest gainer in USD terms was Namibia at 6.21% followed by Botswana. While all various African stock exchanges lost considerably in USD terms despite gains in local currencies. The biggest loser so far has been Zambia at -50%. The Zambian Kwacha has been on downward spiral as the copper producing country grapples with weak copper prices that have seen several mines close down due to prices below the production cost.

It was a busy week for the BSE, particularly on Wednesday as the markets traded 1 570 915 of shares to make the day’s revenue of over P5 million. The biggest trader on that day was Choppies, whose trade amounted to 28% of traded volume of shares. As the year approaches the end, investors will look back at their portfolios with a smile as they realise the gains they have made so far. The Year to date(YTD) percentage change show that 16 companies out of 23 listed in the domestic counter have seen impressive gains.

The biggest winners so far have been Wilderness Safari, Sefalana, Chobe, Turnstar Holdings, Botswana Insurance Holdings Limited and Barclays. Investors are not going to be impressed with losers such as Furnmat, Engen, Stanchart and G4S. As their YTD% has been on the negative side.

On Wednesday 28, Letshego renewed its cautionary note warning investors to trade with caution, as the leading micro lending business announced that it has concluded negotiations and commercial terms with a third party in Nigeria to acquire a100% shareholding in a deposit taking financial institution that specializes in micro finance.

The deal remains subject to regulatory approval. Despite this, Letshego’s share price has fallen from P3.05 to close at P3.01, by end of week. It’s not certain whether investors are reacting to this deal due to Letshego venturing in Africa’s largest economy which is experiencing sluggish growth as the oil producing country grapples with falling oil prices.

In other related market news, MTN was left gobsmacked as its Nigerian subsidiary was fined $5.2 billion for failing to disconnect subscribers with unregistered sim cards. Nigeria is MTN’s biggest market with over 60 million subscribers. The report has left some investors scuttling for cover as they cashed on their investment, signalling their doubts about the management of the company and its future.

The panic selling led to MTN’s share prices dropping by more than 18 percent.  MTN could also face a potential investigation of insider trading, this stems from the announcement of the fine which was only released early afternoon on Monday despite its announcement in Nigeria on Sunday.

Questions are being asked as to why MTN didn’t release the grim news early morning, further more damning was the furious trade of MTN stocks early Monday morning as if the sellers were privy to the information before it was released to other shareholders.

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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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