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BSE turnover down

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2.8% drop attributed to Choppies suspension and Wilderness and Furnmart delisting

The continued suspension of Choppies from trading its shares on the Botswana Stock Exchange Limited (BSEL) together with the delisting of Wilderness Safaris and Furnmart have contributed to reduced levels of turnover at the stock market.

This is according to the BSE market report for 2019.

During the year, turnover levels at the stock market went down by 2.8 percent, dropping from P4.4 billion to 4.2 billion.

The suspension of Choppies – implemented in November 2018 – as well as the delisting of the other two companies are said to be major contributing factors to the slight decline.

These three entities reportedly contributed significantly to the market in prior years due to their sizes and contribution to diversity of sectors on the exchange.

Their departure and suspension have dealt a heavy blow to the stock market and have in addition negatively impacted domestic market capitalization, which has reduced by P3.7 billion to P38.7 billion from P42.4 billion recorded in 2018.

By comparison, domestic companies have been observed to be the most traded counters relative to foreign companies, having contributed 97.8 percent to the total equity turnover on the stock market in 2019.

Still on the domestic board, the property sector was the most traded, followed by the retail and wholesaling sector with contributions of 28 percent and 23 percent to domestic turnover respectively last year.

According to the market performance report, the foreign mining sector remains the largest in value and most illiquid.

Anglo American, a diverse mining conglomerate which owns an 85 percent stake in De Beers group,is the only mining company that contributes significantly to this sector.

The mining giant,which is also listed on the Johannesburg and London Stock Exchanges, accounted for 93.2 percent of foreign equity market capitalization and for 84.3 percent of the total market equity capitalization.

By way of investor contribution, local institutional investors are reported to have dominated trading activity in 2019, accounting for 56.7 percent of the total equity turnover while foreign institutional investors accounted for 32.1 percent.

It is reported that in 2019, local institutional investors and local individuals were the net sellers of equity while foreign companies were net buyers.

This is regarded as a sign of improved outlook into the domestic equity market relative to peer frontier markets.

The market has also seen an improved number of local individual investors, with the number increasing from 4.5 percent to 9.9 percent between 2018 and 2019.

These individuals have in monetary terms, seen their trades result in P178.5 million in turnover in 2019, an substantial increase from P83.8 million registered in 2018.

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