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Local equity market in director buying spree

A trend has emerged where company directors are buying shares in companies they hold directorships of and this fashion is happening across all the sectors in the Botswana Stock Exchange.

Market watchdogs and observers see this as a movement by shareholders to increase shares since share prices are currently low hence these will be good purchases.

Before the end of markets last week retail moguls Ramachandran Ottapathu and his long-time business partner, Farouk Ismail, each bought 5 million shares of Choppies when the share price was 60 thebe; together amassing 10 million ordinary shares at P3 million.

On Thursday it was announced that Choppies founding shareholders bought shares from their own company, Ottapathu 8 million shares worth P4.8 million and Ismail 5 million shares at a tune of P3 million.

The Choppies Directors claimed the 13.23 million shares transaction that went through the market on Tuesday. The shares were almost evenly split between the company’s Chief Executive Officer and a Non-Executive Director — and all went through the market at the prevailing market price of P0.60/share, said Motswedi Securities on Thursday.

Another Choppies shares transaction done by director, Ismail, was announced by the local stock exchange midweek. Ismail, alone on Tuesday, bought 365 000 shares with the same share price of 60 thebe and they costed him P219 000. So far Ismail spent P3.2 million to buy shares from Choppies.

On Tuesday Motswedi Securities said trading on the local exchange accelerated, as the number of shares traded climbed to 19.44 million with a turnover of P13.21 million, from the previous day’s modest activity of 62 100 shares valued at P551 000. Talking of Ismails midweek transaction, the stockbroker said the market saw another large block of Choppies shares moving across the board, with this block being slightly bigger at 13.27 million shares valued at P7.96 million.

The same week saw Choppies holding the stranglehold of the local market, claiming the overall liquidity with trades that crossed 10. 4 million shares, according to Motswedi Securities. This being a little over 70 percent of the total 14.7million shares that went through the market in the week. The total turnover was at P11.4 million a considerable increase from the prior weeks turnover of P3.5million, said Garry Juma and Salome Makgatle, Motswedi Securities researchers.

Both the two directors in a brief encounter with BusinessPost this week acknowledged their share buying galore as a vote of confidence on their enterprise. Only our confidence in the company, they both agreed.

The two directors buying spree came four days after Choppies went for the 2018 and 2019 Extraordinary Meeting concurrently. According to fund management firm Kgori Capital, in the 2018 Extraordinary Meeting, all resolutions were passed by 82.0 percent and above with the exception of: Ordinary Resolution 1, approval of the 30 June 18 financial statements, 46.4 percent of shareholders voted against and 53.5 percent voted in favour. The other exception was a Special Resolution, ratification of donations made, where 39.0 percent of shareholders voted against and 60.5 percent voted in favour.

For the 2019 meeting, all resolutions were passed by 81.5 percent and above with the exception of; Ordinary Resolution 1, approval of the 30 Jun 19 financial statements, 46.5 percent of shareholders voted against and 53.4 percent voted in favour. Again, the Special Resolution of ratification of donations to be made won amassing 60.4 percent against 39.1 percent votes.

This month has already seen six deals involving property giant Turnstar Group Managing Director, Gulaam Abdoola. Two of the deals he was dealing in he dealt in his personal capacity while the others his associates were the ones purchasing the shares. On Tuesday Turnstar announced that Abdoola has bought 3000 shares at a share price of P2.50 for P7500.

Last week, before the markets closed, Choppies directors in their buying spree were joined by the Managing Director of property giant, Turnstar, announcing purchase of the companys shares by a director. According to Kgori Capital, Turnstar Group Managing Director, Abdoola, bought 10,699 shares at P2.20 P2.40 per share.

The company last week Thursday further announced that the Managing Directors associate Moosa Abdoola, also amassed 5,000 shares at P2.50 per share and the time when the share price was P2.50 (a year to date comparison of -11.03 percent). Last week Wednesday another associate of Turnstar Managing Director, Abdoola, by the name of Ahmed Ismail Patel, purchased 1 000 shares for P2500.00.

The same day Mrs Hawa Amod Abdoola, an associate of the Managing Director closed in on 3000 shares at the total transactional value of P7500.

Turnstar closed the week 13.6 percent higher at P2.50/share. The price gain shaved off almost half of the stock’s year to date losses, to close at negative 11 percent. It is worthy to note that this gain in Turnstar was the first positive price movement on the Equity market since the 7th October 2020 (about 2 weeks), said Motswedi researchers.

Juma and Makgatle highlighted that a large chunk of the gains in the week coincided and sometimes were an effect of transactions by a Directors and an Associate of the same Directors trading.

The BSE indexes gained in the week a welcome effect of the gain in Turnstar. The Domestic Company Index (DCI) and Domestic Company Total Returns Index (DCTRI) gained 0.39% and 0.63% respectively says Motswedi Securities recently released weekly update.

In the first two weeks of October, it was Choppies retail rival Sefalanas Group Managing Director, Chandrakant Chauhan, who bought a total of 273 756 shares in a back to back market purchase transaction. In those two weeks Chauhan used over P2 million to make those transactions. The companys share price remained flat at P9.30 during those transactions and it remains at the same price before the closure of this weeks markets.

Chauhan bought shares before Sefalana heads for their Annual General Meeting which will be held virtually via Microsoft Teams, on Friday 30 October 2020 at 16H00 for the purpose of transacting the following business. One of the major business decisions will be to ratify the appointment of Susanne Swaniker-Tettey as an Independent Non-Executive Director with effect from 1 October 2020. Swaniker-Tettey is Chief Financial Officer of De Beers and is a Chartered Accountant with 21 years post qualification experience with extensive experience in governance and compliance.

The same decision will also be on economist Mr Moatlhodi Sebabole, who should be appointed as an Independent Non-Executive Director with effect from 1 October 2020

There will also be matter worth noting like the resignation of Dr Keith Robert Jefferis from the Board with effect from 31 May 2020. Reginald Mootiemang Motswaiso also retires in accordance with the Articles of Association with effect from 30 October 2020. The same noting will be for Elias Moyo Dewah who also retires in accordance with the Articles of Association the same date. Former Vice President of Botswana, Dr Ponatshego H K Kedikilwe, will also retire at the AGM.

Prior to the presentation of its half-year ended 31 August 2020 on 1 November 2020, tourism outfit, Chobe Holdings, board announced that Groups results before tax for the period under discussion will likely be between 140 – 145% (approximately P147.2 million to P152.4 million) lower than that reported for the comparative period ended 31 August 2019 which amounted to a profit of P 105.1 million.

Despite the gloomy news, Chobe announced that on 9 October 2020 a director at the company, Adams Tuomey Chilisa Dambe, bought 104 355 shares at P9.49 per share and the Total Value/deemed value of the transaction is P990,328.95.

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Business

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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Business

Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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Business

Electricity generation down 15.8%

9th January 2023

Electricity generation in Botswana during the third quarter of 2022 declined by 15.8%, following operational challenges at Botswana Power Corporation’ Morupule B power plant, according to Statistics Botswana Index of Electricity Generation (IEG) released last week.

The index shows that local electricity generation decreased by 148,243 MWH from 937,597 MWH during the second quarter of 2022 to 789,354 MWH during the third of quarter of 2022.

This decrease, according to the index, was mainly attributed to a decline in power supply realized at Morupule B power station. The index shows that as a result of low power supply from the plant, imported electricity during the third quarter of 2022 increased by 76.3 percent (123,831 MWH), from 162,340 MWH during the second quarter of 2022 to 286,171 MWH during the current quarter and Statistics Botswana added that the increase was necessitated by the need to augment the shortfall in generated electricity.

In the index Statistics Botswana stated that Eskom was the main source of imported electricity at 42.0 percent of total electricity imports. “The Southern African Power Pool (SAPP) accounted for 38.4 percent, while the remaining 10.1, 9.1 and 0.5 percent were sourced from Electricidade de Mozambique (EDM), Cross-border electricity markets and the Zambia Electricity Supply Corporation Limited (ZESCO), respectively. Cross-border electricity markets are arrangements whereby towns and villages along the border are supplied with electricity from neighbouring countries such as Namibia and Zambia.”

The government owned statistics entity stated that distributed electricity decreased by 2.2 percent (24,412 MWH), from 1,099,937 MWH during the second quarter of 2022 to 1,075,525 MWH during the third quarter of 2022. The entity noted that electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 85.2 percent during the third quarter in 2022 and added that this gives a decline of 11.8 percentage points. “The quarter-on-quarter comparison shows that the contribution of electricity generated to electricity distributed decreased by 11.8 percentage points compared to the 85.2 percent contribution during the second quarter of 2022.”

Statistics Botswana meanwhile stated that the year-on-year analysis shows some improvement in local electricity generation. Recent figures from entity show that the physical volume of electricity generated increased by 36.3 percent (210,319 MWH), from 579, 036 MWH during the third quarter of 2021 to 789,354 MWH during the current quarter. According to Statistics Botswana electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 57.7 percent during the same quarter in 2021. This gives an increase of 15.7 percentage points.

 

The entity noted that trends also show an increase in physical volume of electricity distributed from 2013 to the third quarter of 2022, thereby indicating that there are ongoing efforts to meet the domestic demand for power. “There has been a gradual increase of distributed electricity from the first quarter of 2013 to the third quarter of 2022, even though there are fluctuations. The year-on-year perspective shows that the amount of distributed electricity increased by 7.2 percent (71,787 MHW), from 1,003,738 MWH during the third quarter of 2021 to 1,075,525 MWH during the current quarter.”

The statistics entity noted that year-on-year analysis show that during the third quarter of 2022, the physical volume of imported electricity decreased by 32.6 percent (138,532 MWH), from 424,703 MWH during the third quarter of 2021 to 286,171 MWH during the third quarter of 2022. “There is a downward trend in the physical volume of imported electricity from the first quarter of 2013 to the third quarter of 2022. The downward trend indicates the country’s continued effort to generate adequate electricity to meet domestic demand, hence the decreased reliance on electricity imports.”

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