BSEL feels the COVID-19 heat

Kabelo Adamson
BSEL CEO: Thapelo Tsheole

Having largely withstood the initial impact of Covid-19, it seems the local stock market is slowly starting to feel the paralyzing financial effects of Coronavirus.

12 of the stock exchange’s 33 listed companies suffered a decline in share prices over the first five months of the year.

The hardest hit was Lucara, owners of Karowe Mine, which saw its share price drop by a staggering 49.7 percent to P6.69 between January and the end of May.

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Another mining outfit, Minergy, suffered a telling 22.7 percent blow.

StanChart, SeedCo. and BTCL all endured conspicuous decreases in share price over the same period, recording 17.4, 13, and 12.2 percent respectively.

Other listed companies that closed the first five months of 2020 in the red include FNBB, which lost 8.7 percent on its share price, G4S with 2.9 percent, and the Far Property Company (FPC) which lost 2.4 percent.

ABC Holdings, Chobe Limited, Turnstar, and Primetime all suffered minimal declines, at less than one percent each.

It was not all doom and gloom, however, as seven companies experienced an increase in share price.

Letshego topped the list, with the value of its shares rising by 15.4 percent. Botswana Diamonds (BOD) and Letlole La Rona (LLR) also rose to the occasion, recording 8.3 and 4.4 percent increases respectively.

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Cresta, Sefalana, New African Properties (NAP), and Sechaba all enjoyed a share price increase of less than 1 percent.

Overall, the Domestic Company Index (DCI) experienced a 2.3 percent depreciation from 1 January to 31 May 2020, compared to a 1.6 percent decrease recorded in the same period last year.

The Foreign Company Index (FDI), on the other hand, registered depreciation of 0.7 percent compared to an increase of 0.9 percent over the same period in 2019.

Speaking to Voice Money this week, Head of Research at Motswedi Securities, Garry Juma stressed it was inevitable BSEL would be affected by Covid-19, just like the rest of the financial markets globally.

BSEL feels the COVID-19 heat

“The situation is not exclusive to Botswana and has caused much anxiety worldwide! If you look at the markets globally, all the financial markets have suffered, firstly because of low liquidity, and secondly due to uncertainty caused by the pandemic,” highlighted Juma.

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“Besides the declining of share prices, the number of shares traded has also gone down,” he added.

While numerous companies have reported impressive financial results for last year, Juma warned it is extremely unlikely that 2020 will prove as profitable.

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