Sub-Saharan Africa Stock Markets 2010 Review & 2011 ... - Imara

EQUITY RESEARCH
BOTSWANA
FEBRUARY 2011
2010 REVIEW AND 2011 OUTLOOK
The economy recovered and grew by about 10.7% in
real terms over the four quarters ending September
2010 after contracting by 3.7% in 2009, but despite
this the stock exchange ended the year with a negative
return.
This good economic performance was due to the global
economic recovery, which led to the improvement of
diamond and copper sales in the world market. As a result
the mining sector experienced a 21.7% increase albeit
from a low base. The rest of the economy grew by 6.3%
during the same period.
Total revenues and grants amounted to BWP 30.0bn in
2009/10 representing a net increase of BWP 2.24bn or
8.07% more than the revised estimates. The additional
revenue can be attributed to the recovery of the diamond
markets, with mineral revenue accounting for the highest
increase of BWP 2.25bn or 33.0%. Total expenditure and
net lending in 2009/10 amounted to BWP 39.49bn
compared to BWP 41.27bn in the revised budget,
representing under expenditure of BWP 1.78bn or about
4.3%. As at end of November 2010, foreign exchange
reserves stood at BWP 54.9bn, a decrease of 5.2% from
BWP 57.9bn as at December 2009. The BWP 54.9bn
represents about 17 months of import cover.
On an annual basis the Pula depreciated against the rand
(-6.79%) while it appreciated against the euro (+10.67%),
the pound (+6.58%), and the US dollar (+2.31%),
respectively.
It is anticipated that inflation will, in the short term,
continue to be higher than the upper bound of the
medium term 3%–6% objective range. In addition to the
continuing effect of the increase in value added tax and
administered prices and the December 2010 increase in
the alcohol levy, the short term inflation forecast also
factors in the expected upward adjustment of private
school fees and electricity tariffs and fuel prices. In the
absence of these factors, inflation would be within the
Bank’s 3%–6% inflation objective range. It is, therefore,
expected that inflation will fall within the objective
range in the second quarter of 2011, as the impact of
these transient factors dissipates.
Top 5 Gainers and Losers- 2010 Opening Closing % Change % Change
Company Price Price (LC) (USD)
ABCH 1.29 2.45 89.92% 94.30%
Engen 3.80 6.40 68.42% 72.30%
RDCP 4.20 6.30 50.00% 53.46%
G4S 23.60 31.90 35.17% 38.29%
Chobe 2.10 2.60 23.81% 26.66%
Imara 6.80 3.25 -52.21% -51.10%
StanChart 14.25 8.06 -43.44% -42.13%
Barclays 6.67 5.50 -17.54% -15.64%
Sefalana 3.21 2.70 -15.89% -13.95%
Sechaba 12.85 10.87 -15.41% -13.46%
Source: BSE
Top Ten Shares by market Cap.
Company
(BWP Mn) USD Mn) % of Total
FNBB 5511.96 836.72 21.00
Barclays 4712.45 715.35 17.96
Letshego 3406.63 517.13 12.98
BIHL 2956.86 448.85 11.27
Standard Chartered 2386.76 362.31 9.09
Sechaba 1429.91 217.06 5.45
Engen 1022.22 155.17 3.89
Wilderness 1009.47 153.24 3.85
Furniture Mart 667.6 101.34 2.54
Turnstar 547.85 83.16 2.09
Source: BSE
DCI relative to the S & P Africa Frontier Index
1.30
1.20
1.10
1.00
0.90
0.80
The Bank Rate was maintained at 10% during most of
2010, with a bank rate cut of 50 basis points coming in
mid-December 2010. The average prime lending rate of
commercial banks was constant at 11.50% between
December 2009 and mid December 2010. The yield on the
14-day BoBC decreased from 7.10% at the end of
December 2009 to 6.56% in December 2010, while the 3-
month BoBC yield also eased to 7.15% in the same period
from 8.20%.
Jan-10
Feb-10
Aug-10
Jul-10
Jun-10
May-10
Apr-10
Mar-10
S&P African Frontier Index
Sep-10
Oct-10
DCI
Nov-10
Dec-10
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