[2008-10-08]  FSG empowers local investors
Funeral services provider FSG Limited listed yesterday on the main board of the Botswana Stock Exchange (BSE) and made history by netting the highest number of individual shareholders.

FSG's Initial Public Offer (IPO), which ended September 22, 2008 was overwhelmingly supported with total applications amounting to 20.2 million shares for the eight million shares on offer.

"We are extremely proud," said an elated FSG Chairperson, Tebelelo Seretse. "For our offer to be oversubscribed means we have done better than some of the leading companies in this country."A majority of listed companies on BSE are dominated by institutional investors like fund managers, who buy and hold, resulting in lack of liquidity on the capital market.

Analysts believe FSG's unparalleled number of individual shareholders means more ordinary citizens are now participating in the stock exchange. It also means FSG shares, which debuted at 105thebe, will become some of the most liquid shares on the local bourse.

In respect of the private placement, applications totalling 83,3 million shares were received for the 28 million shares on offer at a price of 100 thebe per share.On the opening day of trading yesterday the price rose by 10 percent to 110 thebe, reflecting investors interest in the counter. Bids were at 109 thebe, while offers were at 120 thebe and a total of 290,612 shares exchanged hands.

Seretse said when the company initially proposed plans of listing, it was not sure that it was the best thing to do. Its directors are now "certain and confident" they have made the right decision.

She urged other private companies to emulate them and list on the BSE to help diversify Botswana's economy.

"The duty of developing our economy lies with all of us," she said. "I believe we all need to do our part for Botswana to become a financial hub."

FSG plans to use the cash it has raised through the listing to establish private cemeteries, pay off existing debt and open subsidiaries in other sub-Saharan countries.

FSG is a holding company incorporated in Botswana in 2003. It has four subsidiaries, namely, Lynn's Funeral Parlour, Kagiso Funeral Parlour, Private Cemeteries and V & N Coffin and Casket Limited, which is registered in and operates from Zambia.

Meanwhile, after trading resumed last Thursday following Independence Day celebrations, the DCI rose further, lifted mainly by gains in the financials of companies such as Stanchart and Letshego.

But its winning run came to a halt on profit taking in counters such as Letshego and Olympia Capital on Friday. On the other hand, pulled down by a loss in Anglo, the FCI plunged 22.68 percent on a single trading day on Friday, the biggest loss on a single trading day so far this year. This resulted in the FCI reversing its positive year-to-date performance and is now down by 10.25 percent.

For the week, the DCI gained 1.34 percent to 8,566.83 points, while the FCI plummeted by 22.7 percent to finish below the 2,000-point mark; consequently, the ACI came off 21.47 percent to 2,150.96 points.

Going into the future, analyst Garry Juma of Motswedi Securities said they expect the DCI to continue on a recovery mode and the FCI to weaken further as a result of the current volatility in global equity markets caused by the financial crisis in the US.

Despite the passing of the American government's US$700 billion bank bailout plan, markets are sceptical that the plan will stabilise the economy.

"Against this background, we expect the current volatility on global equity markets to persist in the short- to mid-term, hence we expect most companies on the Foreign Equity Main board to weaken further in line with losses from their primary markets," Juma said.

For the week, financial counters were the biggest movers, led by Stanchart up 2.5 percent to 1,810thebe. Barclays pushed on another 2.4 percent to 840thebe while FNBB and Letshego gained 1.5 percent and 1 percent each to finish the week at 330thebe and 1,540thebe respectively.


Source: © MMEGI 2002 - 2008