Wanetsha Mosinyi
12 January 2009
The Domestic Companies Index (DCI) on the Botswana Stock Exchange (BSE) kicked off the year 2009 on a positive note, pushing on 0.48 percent to close at 7,069.08 points.
Impressive gains in financial giant FNBB and some middle capitalised counters such as PrimeTime and FSG catapulted the DCI to a strong start. On the other hand, the FCI finished the first trading week of the year in the red, following losses in African Copper and DiamonEx. According to the Weekly Financial Report by Motswedi Securities, the year 2009 is likely going to be more challenging than 2008 as most sectors of the economy are expected to contract as a result of the global financial downturn, especially the mining sector.
"However, in spite of this, we believe the current prices of most stocks on the local bourse provide investors with a good opportunity to increase their holdings on the market," says analyst Garry Juma.
According to Motswedi Securities' computations, the BSE is still one of the best performing markets in the world in pula terms, despite the blood bath that has been experienced in most major global stock markets. Motswedi Securities says when using January 2005 as the base year, they have calculated that the DCI has moved by 169 percent, while inflation (CPI) has moved by 48.8 percent, outpacing inflation by a convincing 121 percentage points as shown in the graph. During the past week, a total of 279,633 shares valued at P360,115 were traded while total market capitalisation for domestic listed firms closed the week at P27.1 billion. For the week, resources such as Aviva, Iamgold and Discovery Metals were the biggest movers as investors took advantage of the current lower prices.
Financial giant FNBB raced to 220thebe after recording two successive gains during the week on increased buying. There is increased interest on the counter as evidenced by higher bids and very few sellers, indicating investor confidence in the stock. Funeral Services Group, FSG, jumped to a new high of 120thebe since its debut listing on increased buying. Property giant PrimeTime anchored the list of gainers, up 5.2 percent to 142thebe.
On the downside, African Copper and DiamonEx were the biggest losers, finishing the week 39.4 percent and 25 percent softer respectively. DiamonEx initially rose to 36thebe on Tuesday before dropping to close the week at 30thebe as some investors offloaded their holdings. Blue Financial Services lost 20.2 percent to 367thebe, while tourism operator Chobe Holdings came off by 17.3 percent to 310thebe. African Diamonds shed 16.3 percent to 410thebe, Letshego lost 15 percent to 1,275thebe and Barclays Bank shed 11.4 percent to 620thebe. Other losses were observed in Olympia, Anglo, A-Cap, Turnstar, BIHL, Furnmart and ABCH. Meanwhile, the BSE has discontinued the computation and publication of the All Companies Index (ACI) as it does not adequately reflect the trading patterns and price changes on the BSE, given that market capitalisation of the ACI is heavily weighted in favour of foreign companies and that liquidity in respect of foreign companies is extremely low.
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