[2008-11-26]  Time to accumulate as BSE stocks plunge
Stock prices on the Botswana Stock Exchange continued to plummet as investors crystallised profits from earlier gains.Against the background of the continued drop in share prices, analysts believe now is the perfect time to take advantage of weak prices and take a position on the market.

Last week, the profit taking that had been prevalent on large capitalised counters spread through to other middle caps such as Engen, Sefalana, Chobe and PrimeTime. Against this background, the DCI lost another 2.08 percent to close below the 8,000-point mark, the first time since September 12.

The FCI lost by another 0.04 percent to 1,216.34 points despite some notable gains observed in some counters such as Diamonex and African Diamonds as investors took advantage of previous losses. Only three counters recorded gains during the week, while 14 recorded losses and 14 others were static.

"We believe the current weakness in most stocks, especially on the DCI, will provide investors with an opportunity to accumulate more shares at a lower price and we urge investors to take advantage of this and accumulate more shares," says a market report by Motswedi Securities.

"On the other hand, we expect the FCI to remain volatile mainly as a result of the continued volatility on global financial markets, a factor likely to result in cautious trading on most counters on the Foreign Equity Main Board.

"During the week, Diamonex came back to (its) winning ways, pushing on 13.6 percent as investors snapped up the counter following the recent declines. A total of 384,892 shares were traded on the counter during the week, reflecting investors' renewed appetite for the counter."

FSG retreated for the first time since listing on the BSE, shedding 5thebe to close at 110thebe. The counter flattered to deceive as it raced to a 10thebe up-tick on its debut on the bourse. At its peak, the counter boasted a 15-percent appreciation to its listing price but has since fallen a victim to the marauding bears let loose on the bourse.

Barclays staged a mini revival by clawing back 1thebe to close the week at 750thebe, having shed 30t on the opening day of the week followed by 1thebe the very next day. Engen weakened by 15thebe to 455thebe while Sefalana traded down by 11thebe to close at 339thebe.

RDCP, Chobe and ABCH each lost 10thebe to close at 350thebe, 400thebe and 400thebe respectively. FNBB went down to 270thebe from last week's 275thebe while Olympia and PrimeTime parted with 1thebe apiece to close at 109thebe and 129thebe respectively.
Meanwhile, Chobe Holdings released unaudited results for the six months ended 31 August 2008. Revenue increased by 55.4 percent to P72.46 million. Operating profit rose by 32.5 percent to P27.25 million and profit after tax went up 34 percent to P23.72 million.

The company's total assets increased by 157.8 percent to P204.45 million from P79.3 million in the corresponding period in 2007. Acquisitions of 100 percent of Ker & Downey Botswana (Pty) Ltd and 50 percent of The Bookings Company (Pty) Ltd were concluded over the period under review. However, no dividend was declared by the company.

In other stock market developments, Capital Securities reports that the BSE Main Committee has taken a decision to discontinue the computation and publication of the All Companies Index (ACI) with effect from January 1, 2009. The index (like other BSE indices) is market capitalisation weighted.

Given that market capitalisation is heavily weighted in favour of foreign companies and that liquidity in respect of foreign companies is extremely low, the ACI does not adequately reflect the trading patterns and price changes on the BSE.

In another development, Primetime, Letshego and Sechaba will be transferred to the CSD with effect from 1st December 2008 and the clearing and settlement of shares on trades in these companies will take place through the CSD. This will complete the dematerialization process on both domestic boards with the foreign boards set to follow in the New Year.



Source: MMEGI