Domestic Equities: Stanchart sinks further

Stanchart’s share price has been on a slippery slope for the better part of the year. The bank is currently the BSE biggest loser, having depreciated by 33.2% for the year. The downward trend began two and a half years ago, following weakened financial performance by the bank. In the time since, the market capitalization has fallen to 1.55 billion pula from 3.75 billion pula in November 2015. In just three years the banks value has dropped by 2.2 billion, in line with the share price, which is down by 58.9% over 3 years.

The latest results for the period ended June 2017, plunged the bank into losses, due to a once off impairment. The director’s report stated that “the subdued performance for the Group in the last three years was mainly caused by one off impairments; a diamond and jewellery client in 2015, a mining client in 2016 and another diamond and jewellery client in 2017.”

Historically the bank has had major exposure to the mining sector, and with the slump in commodity prices, the ensuing mine closures, and dampened mining activity, significantly impact on the bank’s profitability.

Letshego suffered yet another blow to its share price after losing 3 thebe this week to close at P1.93 per share. Selling pressure continues to drive the price down, and with the holiday season ahead of us, retail investors may come to the market looking to sell which may exacerbate the problem.

Sechaba closed the week softer after trading 2,541 shares 2 thebe lower for the week. BTCL continues to outshine as the stock bagged another 6 thebe this week to close at a record high of P1.71 per share.

The rush to quickly buy at low prices is not just something seen at malls on Black Friday, but investors have also been rushing to get their hands on BTCL shares and have pushed the price up by 15 thebe per share in 7 days. (Motswedi Securities)