[2008-10-22]  Profit takers creep in on BSE
Investors at the Botswana Stock Exchange (BSE) have begun to lock in profits realised in the past two months with blue chip counters pulling down the mainstream Domestic Companies Index (DCI) last week.

On a week on week basis, the DCI, in direct contrast to the surge in recent months, shed off 1.10 percent to finish last week at 8,534.98 points as investors crystallised windfalls from some large capitalised financials such as FNBB and Barclays.

On the back of a string of good corporate results released by listed companies in the just ended reporting season, the DCI was on a bull run with FNBB leading the pack.

Now as profit takers begin to creep in, the result has been the creation of a share over- hang which is now forcing prices to pull back.

FNBB, the largest counter by market capitalisation and one of the most celebrated pacesetters on the bourse, reversed its recent gains, slipping 5.88 percent, or 10thebe to close at 330 thebe. Robust demand, which has been steering the share price from its 12 months low of 235 thebe, has now cooled off as investors reposition themselves.

Barclays further trimmed its share price by five thebe, to close at 820 thebe. Elsewhere on the domestic board, Prime Time slumped 3.45 percent, or five thebe, to 140 thebe, Sefalana lost 2.78 percent, (10 thebe) to 350 thebe. Chobe and Sechaba went down 10 thebe each to close at 420 thebe and 1,600 thebe. The only gainer was FSG, which went up 4.55 percent, or five thebe, to 115 thebe.

"Letshego released its interim results for the period ended July 31, 2008. The company's net interest income rose 56.9 percent to P140 million and the bottom line earnings for the year surged 62 percent to P96 million.

"The group is actively pursuing further expansion opportunities in other African territories. In line with this aspiration, an interim dividend is being deferred and will be paid along with the final dividend when the group's full year's results are being released.

"The share price on the BSE ended the week unchanged at 1540t," said a market report from Capital Securities.

On the other hand, sanity is beginning to prevail on the foreign board, which had been heavily affected by the turmoil on the international markets. The FCI returned to profit, following gains in most counters on the foreign equity main board after global markets recorded some gains during the week under review, pushing on 0.3 percent to close the week at 1,561.8 points.

Against this background, the ACI finished the week 0.18 percent higher at 1,729.86 points. The resources sector has been under severe pressure for a prolonged period of time. This has presented buying opportunities for those who had missed the boat the first time round. For the week, Diamonex was the biggest mover, up 28.6 percent to 90 thebe as investors took advantage of the recent dip in the counter.

Discovery Metals pushed on 18.9 percent to 170 thebe and FSG Limited surged to 115 thebe on its second trading week since its debut listing on October 6. The counter has since risen by 15 percent from its IPO price of 100 thebe.

Turnstar pushed on 3.7 percent to 140 thebe. Losses were registered by Investec, which plunged by 28.2 percent to 3,500 thebe, Aviva came off 23 percent to 154 thebe, A Cap shed 22.6 percent to 154 thebe and African Copper finished the week 8.2 percent lower at 67 thebe.

Looking ahead, analysts expect the DCI to continue on a recovery mode, and the FCI to be volatile as a result of the current volatility in global equity markets.

"Despite the passing of the US government's $700 billion bank-bailout plan, markets are already skeptical 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," Motswedi Securities said in a report.


Source: © MMEGI 2002 - 2008