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Local equity market in director buying spree

Turnstar Group Managing Director Gulaam Abdoola

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 Ismail’s 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 week’s 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 company’s 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 Director’s 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 Director’s and an Associate of the same Director’s 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 Sefalana’s 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 company’s share price remained flat at P9.30 during those transactions and it remains at the same price before the closure of this week’s 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 Group’s 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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Gambling Authority tender dangles as a jittery lottery quandary

30th November 2020

Lucrative and highly anticipated national lottery tender that saw several Batswana businessmen partnering to form a gambling consortium to pit against their South African counterparts, culminates into a big power gamble.

WeekendPost has had a chance to watch lottery showcase even before the anticipated and impending national lottery set-up launches. A lot has been a big gamble from the bidding process which is now set for the courts next year January following a marathon legal brawl involving the interest of the gambling fraternity in Botswana and South Africa.

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The uncertainty of getting the next meal in Botswana

30th November 2020
uncertainty of getting the next meal

Households representing more than half of Botswana’s population-mostly residing in rural areas- do not know where their next meal will come from, but neither do they take into consideration the quality and/or quantity of the food they consume.

This is according to the latest Prevalence of Food Insecurity in Botswana report which was done for the 2018/19 period and represents the state of food insecurity data even to this time.
The Prevalence of Food Insecurity was released by Statistics Botswana and it released results with findings that the results show that at national level 50.8 percent of the population in Botswana was affected by moderate to severe food insecurity in 2018/19, while 22.2 percent of the population was affected by severe food insecurity only.

According to the report, this translates to 27 percent of the population being food secure that is to say having adequate access to food in both quality and quantity. According to Statistician General, Burton Mguni, when explaining how the food data was compiled, Food and Agriculture Organization of the United Nations (FAO), is custodian of the “Prevalence of Undernourishment (PoU)” and “Prevalence of moderate or severe food insecurity in the population based on the Food Insecurity Experience Scale (FIES)” SDG indicators, for leading FIES data analysis and the resultant capacity building.

“The FIES measures the extent of food insecurity at the household or individual level. The indicator provides internationally comparable estimates of the proportion of the population facing moderate to severe difficulties in accessing food. The FIES consists of eight brief questions regarding access to adequate food, and the questions are answered directly with a yes/no response. It (FIES) complements the existing food and nutrition security indicators such as Prevalence of Undernourishment.

According to the FIES, with increasing severity, the quantity of food consumed decreases as portion sizes are reduced and meals are skipped. At its most severe level, people are forced to go without eating for a day or more. The scale further reveals that the household’s experience of food insecurity may be characterized by uncertainty and anxiety regarding food access and compromising the quality of the diet and having a less balanced and more monotonous diet,” says Mguni.

The 50.8 percent of the population in Botswana which was affected by moderate to severe food insecurity are characterized as people experiencing moderate food insecurity and face uncertainties about their ability to obtain food. These people have been forced to compromise on the quality and/or quantity of the food they consume according to the report on food insecurity.

Those who experience severe food insecurity, the 22.2 percent of the population, are people who have typically run out of food and, at worst, gone a day (or days) without eating. According to the statistics, rural area population experienced moderate to severe food insecurity at 65 percent while urban villages were at 46.60 percent and cities/town were at 31.70 percent. Those experiencing the most extreme and severe insecurity were at rural areas making 33.10 percent while urban villages and towns were at 11.90 percent and 17.50 respectively.

According to a paper compiled by Sirak Bahta, Francis Wanyoike, Hikuepi Katjiuongua and Davis Marumo and published in December 2017, titled ‘Characterization of food security and consumption patterns among smallholder livestock farmers in Botswana,’ over 70 percent of Botswana’s population reside in rural areas, and majority (70%) relies on traditional/subsistence agriculture for their livelihoods.

The study set out to characterize the food security situation and food consumption patterns among livestock keepers in Botswana. “Despite the policy change, challenges still remain in ensuring that all persons and households have access to food at all times. For example, during an analysis of the impacts of rising international food prices for Botswana, BIDPA reported that food prices tended to be highest in the rural areas already disadvantaged by relatively low levels of income and high rates of unemployment,” said the study.

According to the paper, about 9 percent of households were found to be food insecure and this category of households included 6 percent of households that ranked poorly and 3 percent that were on the borderline according to the World Food Programme’s (WFP) definition of food security.

Media reports state that the World Bank has warned that disruption to production and supply chains could ‘spark a food security crisis’ in Africa, forecasting a fall in farm production of up to 7 percent, if there are restrictions to trade, and a 25 percent decline in food imports.

Food security in Botswana or food production was also attacked by the locust pandemic which swept out this country’s vegetation and plants. The locust is said to have contributed to 25 percent loss in production.

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Solid demand for diamonds towards the ‘gift’ season

30th November 2020

Global lockdown have been a thorn in diamonds having shiny sales, but a lot of optimism shows with the easing of Covid-19 restrictions, the precious stones will be bought with high volumes towards festive season. The diamond market is however warned of the resurgence of Covid-19 in key markets presents ongoing risks amid the presence and optimist about the new Covid-29 vaccines.

The latest findings published as De Beers Group’s latest Diamond Insight ‘Flash’ Report, which looks at the impact of the pandemic on relationships and engagements, has revealed that in the US that more couples than ever are buying diamond engagement rings. Bridal sales is mostly the primary source of diamond jewellery demand in recent months, De Beers said.

According to De Beers, interviews with independent jewellers around the US revealed that the rate of couples getting engaged has increased compared with the period when Covid-19 first had an impact in the US in the spring.

“In addition, despite challenging economic times, consumers were spending more than ever on diamond engagement rings – often upgrading in colour, cut and clarity, rather than size. Several jewellers speculated that with consumers spending less on elaborate weddings and/or honeymoons in the current environment, they had more to spend on choosing the perfect ring,” said De Beers.

According to De Beers, a national survey of 360 US women in serious relationships, undertaken in late October in collaboration with engagement and wedding website, The Knot. This survey is said to have found that the majority of respondents (54%) were thinking more about their engagement ring than the wedding itself (32%) or the honeymoon (15%), supporting jewellers’ hypothesis that engagement ring sales were benefiting from reduced wedding and travel budgets in light of Covid-19 restrictions.

When it came to researching engagement rings, online was by far the predominant channel for gaining ideas/inspiration at 86% of consumers surveyed, with 85% saying they had saved examples of styles they liked, according to De Beers. According to the survey, only a uarter of respondents said they had looked in-store at a physical location for design inspiration.

“For many couples, the pandemic has brought them even closer together, in some instances speeding up the path to engagement after forming a deeper connection while experiencing lockdown and its associated ups and downs as a partnership. Engagement rings are taking on even greater symbolism in this environment, with retailers reporting couples are prepared to invest more than usual, particularly due to budget reductions in other areas,” De Beers CEO Cleaver said.

According to De Beers Group, its Diamond Insight Flash Report series is focused on understanding the US consumer perspective in light of Covid-19 and monitoring how it evolves as the crisis evolves. Also, the company said, it is augmenting its existing research programme with additional consumer, retailer and supply chain touch-basis to understand the pain points and the opportunities for stakeholders across the diamond pipeline.

Demand for diamonds is as hard and resilient as the precious stone itself. De Beers pocketed US$ 450 million in its recently held ninth rough diamond sales cycle, and the company says it is more flexible approach to rough diamond sales during the ninth sales cycle of 2020, with the Sight event extended beyond its normal week-long duration.

“Steady demand for De Beers Group’s rough diamonds continued in the ninth sales cycle of the year, reflecting stable consumer demand for diamond jewellery at the retail level in the US and China, and expectations for reasonable demand to continue throughout the holiday season. However, the resurgence of Covid-19 infections in several consumer markets presents ongoing risks,” said De Beers CEO Bruce Cleaver recently.

High expectations are on diamonds being a sentimental gift for holiday season or as the most fetished gift. However the ninth cycle was lower than the eighth which registered US$ 467 million. For the last year period which corresponds with the current one, De Beers managed to raise US$ 400.

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