BSE equity turnover reaches P1 billion
The Botswana Stock Exchange (BSE) has reported that 464.3 million shares worth P1 billion were traded in the local equity market between January 1st 2022 and November 30th 2022.
According to the BSE’ market performance report released this week, the top 3 traded companies during the period under review were Letshego which traded shares worth P492.6 million shares, followed by First National Bank Botswana (P87.9 million) and Sefalana (P63.4 million). The total turnover from these 3 companies accounted for 63.9% of total equity turnover with the leading counter Letshego accounting for 48.9% of total equity turnover.
The report states that Letshego’s considerable contribution to total equity turnover results from two significantly high trades of P183.0 million on 23rd March 2022 and P142.7 million on 17th June 2022, accounting for the two highest daily trades per counter in 2022 thus far. “Total equity turnover during the review period in 2022 amounted to P1.0 billion from traded volumes of 464.2 million shares, translating into an average daily turnover of P4.4 million. Local companies contributed 58.8% to total equity turnover or P591.9 million while local individuals contributed 4.8% during this period or P48.1 million to total equity turnover. Foreign companies contributed 31.6% or P318.4 million while foreign individuals contributed 4.8% or P48.5 million to total equity turnover respectively,†reads the report in part.
The report shows that total turnover during the same period in 2021 amounted to P1.8 billion, following trading of a total of 965.9 million shares during the period. The report added that the higher turnover was largely attributed to the historic transaction regarding Access Bank’s 78.15% acquisition of Banc ABC Botswana on 11th October 2021 which amounted to P1.1 billion and contributed 60.8% to turnover. During the same period in 2021, top 3 traded companies accounted for 74.9% of total equity turnover with the leading counter Access Bank accounting for 60.9% (P1.1 Billion) of total equity turnover.
The share price performance of listed companies for the period January 1st 2022 and November 30th 2022 shows that of the 31 listed companies, 9 depreciated in share price, 17 appreciated in share price while 5 experienced no share price change. The top gainer over the 1 January to 30 November period was Standard Chartered Bank Botswana (Stanchart) with an appreciation of 43.4%, followed by First National Bank Botswana and Letlole La Rona (Letlole) with gains of 34.4% and 23.5% respectively. BBS Limited experienced the biggest decline in share price after dropping by 40.5% followed by Prime Time Property Holdings and Minergy with declines of 23.8% and 20.0% respectively.
Commenting on the performance of Exchange Traded Funds (ETFs) in BSE during the last 11 months of trading the report noted that ETF turnover amounted to P122.3 million higher than P112.2 million recorded during the same period in 2021. In terms of volume, ETFs traded 782,862 units in 2022 and statistics in the report shows that the newly listed African Development Bank Fund (ADBF) ETF, New Funds ETF, New Gold ETF, BASBI ETF, New Pall ETF prices gained 0.2%, 4.3%, 4.5%, 5.0% and 6.5% respectively while New Plat ETF and BAMIB50 ETF declined by 5.4% and 26.1% respectively.
During the review period the value of traded bonds was P1.9 billion compared to P2.5 billion traded during the same period in 2021 and by the end of November 2022, the market capitalization of listed bonds stood at P26.0 billion.
The Financial Stability Council (FSC) update released last week shows that stock market capitalization at BSE is improving. “The total equity market value of domestic listed companies gained 9.4 percent, year-on-year, to P39.3 billion in September 2022 compared to September 2021 value of P35.9 billion. The gains reflect the overall recovery of the domestic market due to the opening of the economy and the resultant increase in economic activity. In general, the market is showing signs of recovery, with month-on-month increases in market capitalization, leading to a cumulative gain of P5.5 billion since March 2021.â€
FSC is an agency comprised of senior officials from the Ministry of Finance and Economic Development (MFED), the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), the Financial Intelligence Agency (FIA) and BSE. The Council is chaired by Bank of Botswana Governor Moses Pelaelo.
The Council noted that liquidity in the local bourse is also improving, with the liquidity ratio rising to 5.9 percent in September 2022 from 1.8 percent in September 2021 and added that the improvement in stock market liquidity has been due to higher market activity in 2022 than in the corresponding period in 2021.
The Council stated that the domestic stock market is profitable. “The Domestic Company Total Return Index (DCTRI) appreciated by 11.6 percent in September 2022 against 7.9 percent in the corresponding period in 2021. This index provides a means for signaling profitability in the domestic stock market as it shows gains or losses in equity positions due to market capitalization appreciation or depreciation and dividend returns. Therefore, the higher appreciation of the DCTRI in 2022 shows that the domestic market is more profitable than it was in 2021.â€
According to the Council the developments in market capitalization in the twelve months to December 2021 translated into a stronger performance of the domestic company index (DCI), as it turned around from a gradual decline that started in 2015 “The losses suffered by the local stock market since 2015 were precipitated by weak economic fundamentals, which partially translated into poor company performance. The DCI recovered to 7010 in 2021, further increasing to 7402 in September 2022, but recorded rising volatility potentially reflecting the inherently risky nature of equity markets. Nonetheless, investor confidence is expected to improve, especially on the back of strong economic prospects for 2022 and beyond.â€
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.