- KBL, Furnmart, NAP lead traders
- 156 million shares traded
- Trade by Domestic Companies rises
A considerable rise in the shares traded by domestic companies listed on the Botswana Stock Exchange Limited (BSEL) for the 2019 first quarter (Q1), resulted in 47 percent growth in revenue, the latest BSE market performance report reveals.
For the first three months of 2019, the BSE had recorded a turnover of P346.9 million, an improvement of 47 percent on the turnover recorded in the same period in 2018 (P236.2 million). The increase was on the backdrop of increased shares traded during the first quarter of 2019 as compared to the previous corresponding period.
While there was a significant growth in revenue, the BSE is yet to match its performance recorded in 2016 at P701.9 million. According to the market performance report, the number of shares traded amounted to 156.1 million shares, which was significantly higher than 100.7 million shares traded during the 1st quarter of 2018. The top the traded companies in terms of value in the first quarter of 2019 were beer brewing firm, Sechaba Breweries Holdings which made P107.6 million from the sale of shares. Sechaba operates Kgalagadi Breweries Limited (KBL), the only beer making company in Botswana. The sudden demand for Sechaba shares was influenced by government’s decision to cut the alcohol levy by 20 percent, and to also revise beer drinking hours. Consequently, trading conditions for Sechaba improved, which resulted in growth for the beer maker. Good prospects at the company, according to Motswedi Securities research will attract investors.
On a daily basis, BSE traded an average of 5.2 million shares, also a growth from the 3.8 million shares traded during the same period in 2018. Furniture retailer, Furnmart Limited made P68.4 million from trading its shares. The company is on the verge of delisting. Its directors believe that it is uneconomical for it to remain listed because of high listings expenses, while earnings growth is not that significant. Further, New African Properties Limited was the third largest trader for the period, raking in P31.2 million in turnover.
These three companies accounted for 64.8 percent of total turnover compared to the 76.2 percent accounted for by the top three traded companies in the same period in 2018. As a result, the Domestic Company Index (DCI) experienced a better start to the year with a marginal improvement of 0.43 percent in the period 1 January to 31 March 2019 in comparison to a 3.1 percent decrease registered in the same period in 2018. The Domestic Company Total Return Index (DCTRI) appreciated by 1.03 percent, boosted by a combination of price and dividend improvements during the quarter.
Local investors’ contribution to the capital market remains insignificant. According to the BSE, the contribution by local companies amounted to 22.6 percent in Quarter 1 2019 in comparison to 34.8 percent in Quarter 1 2018. Local individual investors contributed an improved 7.3 percent relative to 5.7 percent in the corresponding period in 2018.
Further, the Exchange Traded Funds (ETF) market was less active compared to Quarter 1 of 2018. The volume of ETF units traded was 304,588 in 2019 while the turnover registered was P26.6 million. Over the same period in 2018, the number of units traded amounted to 451,869 yielding a turnover of P41.4 million.
An exchange-traded fund is a marketable security that tracks a stock index, a commodity, bonds, or a basket of assets.
Trading activity in the bond market increased significantly in 2019 (period to 31 March 2019) compared to the same period in 2018. The value of bonds traded over the period was P251.9 million in comparison to P27.4 million traded over the same period in 2018. At the 1 March 2019 Government Bonds and Treasury Bill auction, the Bank of Botswana (BoB), on behalf of the Government offered additional tranches of the BW013 (P137.00 million allotted, increasing its total nominal amount in issue to P1.o billion)and the BW014 (P335.00 million allotted, increasing its total nominal amount in issue to P931.00 million). On the back of Government bonds tap issuances and new issuances, the market capitalisation of listed bonds increased to P15.4 billion compared to P14.7 billion as at the same period in 2018.