Property counters cruising on the upside

A PrimeTime property

Sechaba was the major highlight of the week after trading 3.6mn shares worth P73.4mn on a single trading session. Sechaba is now the most liquid stock on the local bourse and so far has traded 10.5mn shares worth P211mn this year. There are few large sellers in the market now for Sechaba, while buyers are watching at a distance but with keen interest.

The market seems to be waiting the dust to settle first surrounding the uncertainty and lack of information around the much talked acquisition of the brewery and soft drink manufacturer by world largest brewery maker Ab Inbev. This has also culminated in the subsequent termination of the bottling arrangement with Coca Cola. The alcohol levy which now stands at 55% and the inclusion of excise duty in the calculation of the levy has worsened the financial books of Sechaba as this has created a hole in its bottom line.

For the week, the DCI finished in the red extending its ytd losses to 0.55%. The FCI was static as there were no price movements on the foreign board. Looking ahead, we expect activity to remain low with trades in selected stocks as fund managers rebalance their portfolios or look for bargains.

Barclays and Primetime were the only gainers during the week. Primetime which entered the Zambia market and is planning to do a rights issue gained 0.3% to close at 314 thebe. Barclays gained 0.2% to close at a 52 week high of 589 thebe. The second largest bank by market capitalization initially lost 8 thebe on Tuesday, 23rd May before bouncing back strongly with a gain of 9 thebe on the 24th of May. The price movements are mostly driven by retail investors as the shares are still in demand especially from large institutional investors. It is also comforting to note that Barclays is still the second biggest mover on a year to date basis up 16.9% y/y, trailing BTCL which is at the top of the summit and is up 31.6% ytd.

On the downside, Furnmart which retails domestic furniture and electrical appliances through the network of stores in Botswana, South Africa and Namibia took the biggest knock losing 3.1% of its value to close at a new 52 week low of 63 thebe. The stock had somehow stabilized at levels around 65 thebe after being on a selling pressure the greater part of last year due to poor financial results which later resulted in the closure of operations in Zambia. Telecoms giant BTCL lost again for the second week consequently. This is BTCL second week of regression since the bull run which started on the 9th of December 2016. The small price drop is largely attributable to a lower bid from one large institutional investor who has been in the market lately buying BTCL shares. What is not clear is why a seller would dispose the shares at a lower price especially when the stock is trading on a positive trading update and the upcoming March 2017 FY results are expected to be stronger than the previous period. (Motswedi Securities)