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BTCL clawing down the bearish Q3 local market

BTC MD: ANTHONY MASUNGA

Results for the third quarter of the year, which had a national lockdown, show that 15 counters on the domestic board lost value translating to a 2.2 percent loss on the Domestic Company Index (DCI).

When doing a market study for the third quarter of 2020, Stockbrokers Botswana says the DCI closed the quarter at 7001.22 points (Q2 2020: 7159.66 points). The Q3:2020 was not as much as a bigger contraction compared to Q2:2020 one which was 4.4 percent. On the foreign companies index a loss of 0.2 percent was realized; 1547.33 points (Q2 2020: 1551.16).

A quarter of bearish moves saw market capitalization on the domestic board also dipped by 2.2 percent to BWP36.2 billion from Q2:2020 P37.0 billion and this was because of a tumble of share prices by 15 companies. This was the time when government put up lockdowns (August) and the domestic economy was still reeling from macroeconomic hangover of a reflection of real GDP at 24 percent in the second quarter of this year which is the same quarter Covid-19 broke resulting in disruptions.

Of the 15 counters who lost value, on the top five is Tlou (60.0 percent), Lucara (23.5 percent), BTCL (13.5 percent), Choppies (13.0 percent) and Turnstar (11.1 percent). BTCL has been getting the spotlight from market watchdogs as the most suffered stock this year.

Just recently, beginning of this week, BTCL was the main culprit when the local market shock into a bearish surface. Stockbroker Motswedi Securities researchers this week acknowledged that BTCL was the most traded stock by way of liquidity in the Monday trading session. The researchers said under 35,100 shares went through the market, at the stock’s new price low of P0.68/share (1 thebe lower from the session’s opening price).

The BTCL stock currently pegged at year to date performance of negative 28.4 percent and this widens the gap between itself and the nearest stock, according to Motswedi Securities. Motswedi Securities explains this enigma of BTCL losing value as a result of the Covid-19 pandemic, panic selling and the general dilution of investments to free up cash. And this, according to Motswedi is mirrored on the DCI; the DCI and Domestic Company Total Returns Index (DCTRI) lost 0.03 percent in the trading session- year to date losses of negative 8.09 percent and negative 3.67 percent of the domestic indices respectively.

The Q3:2020 has seen BTCL drowning on the pool of bears, the period under review being September. In the corresponding period which is Q3:2020 or September 2019, BTCL prices were at P1.01 before declining to P0.95 into Q4:2019 or the preceding quarter. In the first quarter of 2020 when coronavirus broke out the price went down by 9 thebe. The quarter before this quarter under review, Q2:2020, the price went up by 3 thebe before plummeting by 12 thebe in Q3:2020. Results of the fourth quarter of 2020 are yet to be released.

“The limited demand for the stock continued to lend support to the buyers – allowing them to bid below the market price, as has been happening. The stock’s value loss for the year, currently stands at negative 31.6 percent– leading the domestic equity board, and third largest loser in the overall equity market,” said Motswedi Securities.

On Tuesday, BTCL stock was in the spotlight when BSE increased to 955,000 shares trading with a turnover of P635 000 across 7 stocks on the domestic board. This is because, according to Motswedi Securities, BTCL was on the chopping block for the second consecutive day, that time (Tuesday), giving 3 thebe back to the market to close at P0.65/share. Motswedi Securities recommend ‘Buy’ on BTCL stock which was at P0.68 by press time.

On the Wednesday session, when the sum of 30 000 shares with a turnover of P39 000 was discussed, BTCL was back on the board, crossing some 17,000 shares in the session worth about P11,100 with each share going through the market at the prevailing market price of P0.65/share.

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Business

Gambling Authority tender dangles as a jittery lottery quandary

30th November 2020
SEFALANA MD: CHANDRA CHAUHAN

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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Business

Solid demand for diamonds towards the ‘gift’ season

30th November 2020
Diamonds

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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