Trading at the BSE: Slow start to the week

Trading session opened the week with very low volumes on the first two days with a spike on Wednesday and a huge Letshego trade on Friday. Letshego has experienced some heavy trades over the last 3 months with some investors closing their positions to profit take, while international demand for emerging markets fuelling the supply.

The Pan African micro lender closed the week as the biggest loser having shed ten thebe to close the week at P2.55 a significant 12.1% lower since the beginning of the year. The largest relative price movement came from the dual listed Botswana Diamonds, which leaped an impressive 15 thebe up, as the exploration company began a feasibility study of one of their diamond sites in the diamond rich Gope area, in the central region.

The stock has more than doubled since the beginning of the year closing the week at yield to date of 161.5%. Chobe on the other hand pocketed 19 thebe over the week to close at a new twelve month high of P7.25. Investors were willing to buy up as the week closed the Cum-Div window for a 40 thebe dividend payable on the 24th of June. General demand is high for the closely held tourism stock and thin trades tend to move the price. BIHL and Turnstar holdings continued their upward momentum for another week. BIHL closed the week at P16.35, 5 thebe up from last week while Turnstar advanced by 2 thebe to close at P3.20, both a new twelve month high.

Market activity at BSE has been subdued

In the end the market traded 15.1 million shares valued over 48 million with over 88% of the trades on Letshego. The DCI fell with the heavily capitalised Letshego to close at 10 171.58. Lucara dragged the FCI down to 1598.95, after it trading 49 thebe lower, on thin volumes.

Foreign Exchange: Ran Up, Dollar slumps

The dollar’s performance for the week was bearish, following the Non-farm payroll figures released last Friday. The numbers showed the slowest employment growth in employment figures since 2010, indicating that the US economy recovery is still fragile. This dampened market sentiments of a Fed Rate hike between June and July, which was priced into the greenback. Further delays of the highly expected hike saw the dollar loose appeal and spiral down for the week, ending the week flat as the market looks for direction from next week’s FOMC and the Bank of Japan meetings.

South Africa escaped a credit rating downgrade following Friday’s affirmation by rating agency Fitch. This follows a similar stance by S&P a week earlier. Although GDP growth figures showed a contraction the rand maintained a strong footing, pocketing gains for most of the week. The dollar dropped below ZAR 15 per dollar during the week, however closed slightly above it today.

The save haven Yen benefited from the slipping dollar and increasing fears of a Brexit as we close in on the 23rd of June, the referendum date. The pula closed the week stronger against the dollar but was down against a strengthening rand, albeit unsustainably on mixed data. (Motswedi Securities)