[2008-12-03]  Investors in selling mood ahead of Christmas
The profit taking on the Botswana Stock Exchange (BSE) that had been prevalent on large capitalised counters has spread to small and mid-capitalised counters as investors jostle to take profits ahead of the festive season.

For the greater part of this last quarter of the year, share prices have been tumbling much to the detriment of investors who had taken positions on the local bourse.

The mainstream index DCI finished the week 0.92 percent softer at 7,820.41 points after recording losses on each trading day last week. Year-to-date, the DCI has slipped further into negative territory and is now down by 7.2 percent, while the FCI has plunged by 44.77 percent.

Against the background of such heavy losses, market analysts believe the bloodbath will go on for some time as investors continue to offload stocks. "However, we urge investors not to engage in panic selling as this will result in asset value loss," says Gary Juma of Motswedi Securities.

"Instead, investors should take advantage of the resultant asset price falls to take positions on the market as the current losses in some stocks provide investors with a rare opportunity to increase their holdings."

Although most stocks went down, some counters on the foreign board made some recoveries from earlier losses as gains were recorded in Discovery Metals, up 20.3 percent to 95thebe; A-Cap pushed 7.9 percent to 68thebe while Aviva was in close pursuit, up 7.7 percent to 70thebe. PrimeTime also gained marginally by 0.8 percent to 130thebe.

On the downside, AF Diamonds was the biggest loser, down 21.6 percent to 490thebe, followed by AF Copper which ended the week 12.5 percent lower at 28thebe. Imara finished the week 5.6 percent softer at 920thebe as investors locked in profits. But Imara is still the highest climber on the BSE, up 22.7 percent on a year-to-date.

"Letshego plunged 4.5 percent to 1,500thebe after releasing a statement last week advising shareholders to exercise caution when dealing in their shares because the company will proceed with an equity- related fund raising initiative requiring a special resolution to be approved by shareholders at a Special General Meeting on January 23, 2009.

The expected discounted price of the new Letshego shares will be P12.00 per share," says Juma.

Sefalana slipped 4.1 percent to 325thebe, FNBB shed 3.7 percent to 260thebe and Engen slid by 3.3 percent to close the week at 440thebe. Other losses were in BIHL, Barclays, Chobe, Turnstar, Stanchart and G4S. The table shows all the movers during the week under review.

Meanwhile, Olympia Capital Corporation has released an average set of financial results for the six months ended 31 August 2008. Revenue fell by 15.8 percent to P50.9 million, but there was also a significant reduction in operating costs - from P26.2 million to P20.4 million.

Overall profits from operations firmed by 20 percent to P3.1 million mainly on the back of solid performance from the company's Botswana operations.
The PVC floor tile manufacturing unit achieved exceptional throughput a significant part of which came from exports.

Accordingly, the group's net profit for the year came in 37.5 percent higher at P2.2 million. Olympia's South African operations did not do well following the downturn in retail trade there.
Source: MMEGI