[2007-09-26]  Stanchart Shares Fall Despite Broader Horizons
Standard Chartered Bank shares on the Botswana Stock Exchange have been on a free fall in the past three weeks, losing over 8 percent in value.

Trading at P28.25 per share at the beginning of the month, the share price has tumbled to P26.00 per share by close of trading last Friday.


Interestingly, the decline of the counter's price comes hard on the heels of the company releasing an impressive set of results for the first half on the year.

In the results, Stanchart reported a P132 million after-tax profit with total assets increasing by 24.7 percent to P8 billion, while turnover surged 11.35 percent to P294 million.

However, it is clear that investors have not been moved by the quality of the bank's figures as they continue to offload the stocks.

Other fundamentals that, in a normal situation, should have propped up investors' appetite for Stanchart's shares in the month of September, are the bank's continued diversification of its product range.

The bank recently launched three new products, the Smart Credit Card, the SME Credit Express Facility and the Diva Account for women as part of its diversification and niche marketing strategy.

Other bank counters, Barclays and FNBB, also lost value soon after releasing their results in early September but only Stanchart has been nose-diving for three consecutive weeks.

However, market analysts believe that the fall in Stanchart shares is actually a self correction exercise as the sentiment in the market is that Stanchart, along with the other banks, is actually overvalued at the moment.

"The fall in the share prices is actually driven more by technicalities rather than fundamentals which lead to a fair value readjustment of the share prices.

"Even a rough look at the price-to-earnings ratios will show you that banks have the highest figures by far in comparison with other counters that might probably have the same earnings' base as them," said an analyst with a local stockbroking firm.

Meanwhile, the DCI recouped on the previous weeks' marginal declines to register a 0.1 positive growth last week ,powered by gains in BIHL (2.94 percent), MRIB (2.04 percent) and Chobe (1.15 percent).

Stanchart was the highest shaker on the domestic board, losing 3.7 percent on a week-on-week basis.

The FCI declined marginally, closing the week at 2193.65 points.


Source: Copyright © 2007 Mmegi/The Reporter.