The best, the worst

ABCH
It has been busy year for the regional banking group. Top on the list has been African Banking Corporation Holdings’ (ABCH) acquisition by London-listed boutique, Atlas Mara. Ex-Barclays boss, Bob Diamond backs the latter. In a new twist, the board has announced Chief Executive, Douglas Munatsi, Chief Finance Officer Beki Moyo and Chief Operations Officer, Francis Dzanya will be leaving the lender at the end of the year. They pave way for a new management team appointed by Atlas Mara. The Atlas board has not come out to give ‘real’ reasons for the sudden departure of the three executives. At the domestic board, share price of ABCH stood at 714 thebe at close of business Monday this week. It has fallen marginally by 6 thebe for the year to date. The bank has operations in Botswana and it has announced an African push, where it will come face to face with other players such as Standard Bank and Barclays Africa
Advice: consider buying

Barclays
The past year has been hard for the bank. It is literally battling to keep its position within the top four lenders due to declining profits in recent years. At the domestic bourse, investors appear to have lost interest in its stock. Barclays currently trades at 341 thebe, after shedding a massive 211 thebe for the year to date. The new ‘saviour,’ Managing Director Reinette van der Merwe is yet to steer the ship to calmer waters. During her first six-months stay at the lender, she saw the company’s profit after tax for interim period to June plummeting to P123, 6 million compared to P189 million last year. The company will improve its profits in the foreseeable future, said Merwe.
Advice: don’t buy

BIHL
Botswana Insurance Holdings limited (BIHL) is the biggest player in the insurance industry and asset management field. The blue-chip company has sold the short-term insurance book to Botswana Insurance Company (BIC). The general insurance book was under BIHL Sure, which was formed barely two years ago. It beats logic how the company came to the conclusion to selling the book. Does this mean the company did not do much research before entering the short-term industry? Chief Executive Gaffer Hassam has told the media that they are not exiting the short term insurance industry. The company is aiming to expand beyond Zambia. In the past, BIHL announced plans to partner with Sanlam, its biggest shareholder to explore the region. This has not happened. An unwritten rule is that BIHL cannot enter territories where Sanlam has operations. The former’s private equity and unit trusts have been launched and are expected to boost bottom line. The company’s share price has not seen much growth in the past year, but launched products look set to bring results. Currently, it trades at 1150 thebe, having dropped 3 thebe in the year to date.
Advice: Consider buying

Chobe
Tourism facilities operator, Chobe has one of the most liquid stocks in the market. Its low moment of year was the sudden death of Chairman Julian Nganunu. However, this has not deterred the company from posting strong results amid Ebola threats, which has seen visitors cancelling bookings. As of Monday, the company’s share price was high at 427 thebe, after climbing 122 thebe for the year to date. For the six months period to August, the company has posted profit after tax of P33 million, compared to P29 million in the same period last month. Chobe has not declared any interim dividend in favour of a final year-end dividend.
Advice: consider buying

Choppies
Choppies is the number one grocery store in the country. Its securities are also among the best performing in the domestic market. The firm’s highest share price in the year to date is 430 thebe, its lowest being 320 thebe. Chaired by former President Festus Mogae, Choppies has signalled intentions to enter Mozambique and Zambian markets. The company has cemented its position in Botswana and South Africa’s retail space.
Advice: consider buying

Cresta
Apart from the company’s share scheme for employees, much has not happened to this hotel operator. Cresta acquired Cezar hotel for P25 million last year. It remains to be seen if the new asset will bring desired profits. Golfview Hotel, its Zambian subsidiary is struggling. It posted a 26 percent decline of P9, 3 million in the half year results. Cresta blamed relocation of some Non-Governmental Organisations and competition for the loss. During the period under review Cresta group recorded a profit of P5, 1 million, a drop when compared to P7, 4 million the year before. The loss has not stopped the company from declaring a 5 thebe divided to shareholders. The company shares trade at 89 thebe, down from a twelve high of 100 thebe.
Advice: consider buying

Engen
Engen Botswana, the only listed petroleum company, like many others in the country is anxiously awaiting the full operation of state oil company. Botswana Oil Limited’s main role is to source and distribute petroleum products on behalf of government. Engen has in the past benefited from government’s lucrative tenders to supply petroleum products. The biggest activity of the company this year has been the signing of an agreement with courier company, DHL to become one of the approved centres for handling the latter’s customer parcels. The company’s highest share price to date is 1015 thebe. It currently trades at 965 thebe. A cut in petrol prices by government two weeks ago is a blow for Engen and peers.
Advice: Consider buying

FNBB
First National Bank Botswana (FNBB) is arguably the biggest bank in the country. It is also the biggest as far as digital services provision is concerned. For the year to June 2014, the bank’s profit after tax increased by 3 percent to reach P719 million. FNBB also has the highest market capitalisation which currently sits at P9, 3 billion as of Monday this week. Its share price is currently at 367 thebe. Under, Lorato Boakgomo-Ntakhwana the bank has become stable over the years. She is leaving in two weeks’ time to join FNB in South Africa
Advice: consider buying

FSG
Funeral Services Group is leading undertaker in the country. It has operations in Botswana and Zambia. Company directors have disclosed plans to expand within the region in a bid to prop up revenue. BIHL has a stake in the company. The relationship allows FSG clients access to Botswana Life’s products. This year, FSG shareholders blocked BIHL from increasing its shareholding in the company that also manufactures caskets. Profit after tax for the half year to June was flat at P11, 6 million. It declared a dividend of 6 thebe. The company’s highest share price in the twelve months to date is 250 thebe. As of Monday, it was trading at 237 thebe.
Advice: Consider buying

Furnmart
The furniture retailer has launched P500 million notes programme that is funding expansion.  The notes will be issued in tranches. Furnmart remains a market leader in the furniture retailing business. Revenue for the year ended July 2014 rose by 7 percent to reach P1, 15 billion. The increase was however not enough as PAT declined P71 million, from P108 million posted last year. The company has converted its stores into IT platforms for easy customer services. Managed by Tobias Mynhardt, the company is among the biggest in the industry, targeting middle to upper income earners. HomeCorp, Furnmart and Xtreme stores fall under the Furnmart stable. By Monday, the company shares traded at 220 thebe.
Advice: consider buying
G4S Botswana
Adecision by the board to bring back Michael Kampani to head the company is bearing fruit. G4S has posted improved results for the first time in nearly three years. A turnaround strategy, that included painful job cuts, has resulted with the company reporting a profit after tax of P13, 7 million, up from P6 million in the six months to June 2013. Kampani, a former finance director was recalled from G4S Africa to head the company. G4S shares have also performed satisfactorily in the last few months. It now trades at 274 thebe.
Advice: consider buying

Letlole La Rona
Since acquiring some property of Botswana Development Corporation (BDC), LLR has performed above expectations. Bathuleng Mookodi has taken to the helm at the company after the departure of founding Chief Executive Dimitri Kokinos. BG Business understands she has since left the company. LLR which trade mostly in industrial property, currently manages assets valued at over half a billion Pula. The company’s share price has not moved much. It currently trades at 215 thebe.
Advice: consider buying

Letshego
Founded more than a decade ago, the micro-lending titan has operations in ten countries including Botswana. Letshego is currently executing a strategy to transform into a complete financial service company with the ability to take up deposits. The company has already commenced deposit-taking business in Mozambique. Namibian central bank has awarded the outfit a provisional banking license while in Botswana, Letshego’s main competition comes from commercial banks. With plans to become a full financial services group, and to expand into Africa, its stock remain a must have. By Monday, the company, which is led by Chris Low, was trading at 266 thebe.
Advice: consider buying

New African Properties
NAP’s several properties in the country include Mafenyatlala and Riverwalk malls. Led by Tobias Mynhardt, the company still has to do more to diversify its portfolio in the face of the possibility of over-supply in the retail sector. NAP manages property valued at a billion Pula. With a market capitalisation of P1, 3 billion, the company has aims to go regional. It was trading at 217 thebe this Monday. This was 3 thebe short of the 12 months highest share price to date.
Advice: consider buying
Olympia Capital
In the 12 months to date, the company has never traded and its continued listing status can better be explained by directors. In its nine-year stay at BSE, Olympia had its shares suspended several times after failing to publish scheduled results among other non-compliance issues. The company owns Kalahari Floor Tiles in Mogoditshane village. The company has a market capitalisation of P5 million. It is trading at 20 thebe, same as December 2013.
Advice: don’t buy

Prime Time
The company’s biggest investment to date, Prime Plaza complex at Central Business District (CBD) is now paying dividends. The firm is looking at building more properties in Zambia. In the past year, the value of the company’s property increased by 35 percent to P732 million. The company’s share price was trading at 260 thebe, its highest to date. Its lowest share price that it reached in a year is 225 thebe.
Advice: consider buying

RDC Properties
Masa, a mix use property remains the company’s main revenue generator to date. Executive Chairman Guido Giachetti said they would soon enter the residential market, taking competition to players such as Botswana Housing Corporation (BHC). At BSE, the company share price has not excited many investors despite posting decent results year and year out. It currently trades at 202 thebe. The company has a market capitalisation of P448 million.
Advice: consider buying

Sechaba
There has been a lot of speculation about the possibility of the company going private this year. It took the board nearly a year to decide on whether to stay at BSE or not. Chairman of the board Batlang Mmualefe would later tell Botswana Guardian that the cost of listing far outweighs that of delisting at the current moment. The company’s stock remains a favourite with investors. This is amid tough regulatory space that has made beer drinkers to pay more as a result of the Alcohol Levy. In the year to date, Sechaba’s share price has moved from 1828 thebe to 2810 thebe. Ahead of Christmas holidays, company executives are waiting with bated breath the possibility of another hike on alcohol levy that has dented volumes since 2008.
Advice: consider buying

Sefalana
The diversified outfit has finally entered Namibia’s retail space. Locally, the company is battling with Choppies for the control of the lucrative fast moving consumer goods. Shoppers- its retail arm-has opened stores especially in areas where arch-rival Choppies has presence. Former Vice President Ponatshego Kedikilwe is now chairman following the passing of Julian Nganunu. Punters at the stock exchange are impressed with its stock performance that is now priced at 922 thebe. The lowest price for the year to date is 648 thebe.
Advice: consider buying

Turnstar
The property company went on an over-drive few weeks ago when they revealed the expansion of flagship property, Game City mall. Turnstar’s current property portfolio stands at P1, 7 billion, and the biggest at the stock market by far. Once complete, the mall will pick the company’s revenue in the medium term.
The company’s half-year profits to July increased by P4 million to P70 million as a result of rental increases. Like many of its listed peers, the company is eyeing the regional market. At the stock exchange, the company trades at 208 thebe, compared to its lowest of 170 thebe in the 12 months to date.
Advice: consider buying

Standard Chartered
The bank has managed to be profitable amid tough trading environment that include cut in BOBCs, ban in upward increase in non-interest linked products as well as low interest rate. The company surprised market watchers when it posted a profit after tax of P168, 5 million for the interim results to June 2014, beating the previous P135 million for the year before.
The bank, which is led by Moatlhodi Lekaukau, attributed good profit to increased loans and advances. The bank also announced it has cut deals in the corporate division. At the stock market the company continues to perform well. Its share price is 1258 thebe, the highest in the year to date.
Advice: consider buying
Wilderness Safari
The company, which is under the watch of Keith Vincent, has had an exceptional year. However, this was before the outbreak of Ebola that led to cancellation of bookings for most tourism facilities in the northern part of Botswana. Wilderness took the market by surprise when it posted a profit of P82 million, 69 percent higher than the six months period to August in 2013. With presence in most SADC countries, the company, chaired by prominent lawyer Parks Tafa is planning an Africa push. Should the company survive the Ebola threat, it is likely to post an improved profit when full year results come out after February 2015. The company currently trades at 310 thebe per share.
Advice: Consider buying

Key:
Consider buying: the stock is likely to appreciate based on company prospects.

Don’t buy: The stock is risky. It has fallen to record lows and likely to do so in future.
NB: The above market information was sourced from BSE before official trading on Monday. Share price might have changed by now. Furthermore all recommendations about which stocks to buy or not aren’t necessarily the best. Professional services from stockbrokers can be sought before buying or selling. All market data was sourced from BSE after Monday trading this week.

Last modified on Friday, 19 December 2014 09:28

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