Title : Equity Research Edition : Weekly Bulletin Country : Botswana Date : 26 June 2020 MARKET COMMENTARY Price gainers for the week Price losers for the week Company Price (P) % change Company Price (P) % change The Domestic Companies Index closed the week ended 26 Sefalana 9.09 0.66% Letshego 0.72 -4.00% June 2020 in the red by 0.13% at 7,176.60 pts. The Foreign Companies Index remained unchanged at 1,551.16 pts. Sefalana was the only gainer, up by 0.66% w-o-w to BWP 9.09; and Letshego was the sole loser, down by 4.00% to BWP 0.72. Volumes Turnover BWP USD Letshego 1,296,357 Letshego 934,221 79,035.06 Turnover declined significantly to BWP 1.5m on 1.6m shares transacted vs. the previous week’s BWP 28.8m on BTCL 193,942 Sefalana 189,769 16,054.42 16.7m shares. Letshego was the most traded counter with Sefalana 20,878 BTCL 172,608 14,602.67 contributions of 83.51% and 62.95% to volume and value FNBB 16,084 Engen 106,645 9,022.17 transacted, respectively. Engen 10,284 FNBB 38,602 3,265.70 The BWP appreciated against the USD (+0.59%), GBP (+0.73%) and EUR (+0.53%); while it depreciated against the Rates ZAR (-1.01%). 7 day Bank of Botswana Certificate rate 1.00% Highlights in this week’s edition: 91 day Bank of Botswana Certificate rate 1.00% Bank rate 4.25% • Choppies update on the release of its financial Prime rate 5.75% results • Sechaba to hold AGM Via the Zoom platform Latest inflation (May 2020) 2.40% Source: Bank of Botswana • BancABC AGM Notice • BancABC Board appointment Currency 19-Jun-20 26-Jun-20 % change • Letlole renewed its cautionary announcement ZAR 1.475 1.460 -1.01% • RDCP EGM results • Afinitas AGM results USD 0.085 0.085 0.59% • Tlou received the Electricity Generation License GBP 0.068 0.069 0.73% from BERA EUR 0.076 0.076 0.53% Source: Bank of Botswana Economic & Company News Figure 1: Domestic Companies Index Choppies update on the release of its financial results. 7,800.00 Choppies anticipates that the Interim Financial Results in respect of the period ended 31 December 2018, the Audited Financial 7,600.00 Statements and the Auditor’s Report for the financial year ended 30 June 2019 and the Interim Financial Results as at 31 7,400.00 December 2019 shall be completed and released by 30 July 2020. The Annual Report in respect of the financial year ended 30 June 7,200.00 2019 is expected to be published shortly thereafter. The 7,000.00 company's primary listing is on the BSEL and its secondary listing is on the JSE. The listings on both exchanges are suspended. 26 Jun 19 26 Sep 19 26 Dec 19 26 Mar 20 26 Jun 20 (Choppies) Sechaba to hold AGM Via the Zoom platform. In order to comply with Covid-19 protocols and limit the number Figure 2: Foreign Companies Index of shareholders physically attending the AGM scheduled for Monday 29th June at 11.00am, attendees were encouraged to 1,600.00 attend the meeting via a virtual platform being the software application “Zoom". Shareholders were advised to download Zoom onto their computers before the meeting and then type in 1,580.00 the Meeting ID and Password below: Meeting ID: 819 538 3072 Password: 5R0DUc 1,560.00 (Sechaba) BancABC Board appointment. 1,540.00 BancABC appointed Bosco John Sebabi as an Independent Non - 26 Jun 19 26 Sep 19 26 Dec 19 26 Mar 20 26 Jun 20 Executive Director. Mr Sebabi 20 years of experience in the financial services sector and has served on several Boards, Committees and Task Forces. He was a member of the G25 Panel Figure 3: DCI vs MSCI EM Index of experts that was constituted by the World Bank to set 1.50 guidelines for successful regional integration of Financial 1.40 1.30 Infrastructures. Between March 2013 and April 2014, he was the 1.20 Chief Operating Officer for the East Africa Commodity Exchange. 1.10 Mr. Sebabi served as the Deputy Director General of the Rwanda 1.00 0.90 Social Security Board from July 2014 to October 2018. During his 0.80 tenure, he was in charge of funds management, managing assets 0.70 over USD 1 bn in value. He is currently the Founder and Chief 0.60 Executive of FORTIS Consult, a consulting firm in financial Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 markets infrastructure, financial inclusion and fund management. He holds a Msc in International Economics, Banking and Finance from Cardiff University, (Wales); a Bsc in Economics DCI MSCI EM and an Associate degree in Economics from the National University of Rwanda; and a certificate in Financial Programming and Policy from the IMF. He is also a fellow of the Fletcher Leadership Program for Financial Inclusion of the Fletcher School, Tufts University (USA). He also holds an executive education certificate of the Advanced Management Program (AMP), a sandwich program from Strathmore, Lagos and IESE business schools. (BancABC) 2 BancABC AGM Notice. BancABC is to host a virtual AGM on 26 June 2020 at 09:00 a.m. Shareholders who wish to participate in the virtual meeting should contact the transfer secretary, Grant Thornton Botswana, for dial-in details at [email protected]. Ordinary business resolutions will be conducted. (BancABC) Letlole renewed its cautionary announcement. The Directors of Letlole La Rona Ltd (“LLR”) advise all shareholders that the company is still in negotiations to acquire a significant shareholding in a group which carries on the business of property investment. The successful conclusion of the negotiations may have a material impact on the value of the company’s shares. The Directors therefore advised shareholders to exercise caution in the trading of their LLR securities. (Letlole) RDCP EGM results. RDCP released the results of the Extraordinary General Meeting of Unitholders held on 25 June 2020 - all resolutions were proposed. Grant Thornton will be appointed as auditors for the ensuing year; and the appointment of Ms B Kenewendo as director was confirmed, she was appointed on 28 May 2020 in place of Dr K Jefferis who has resigned from the Board. (RDCP) Afinitas AGM results. Afinitas also announced the results of its Annual General Meeting which was held on 26 June 2020, all resolutions were passed by the required majority. Kindly find attached the update for your perusal. (Afinitas) Tlou received the Electricity Generation License from BERA. Tlou Energy Ltd - an ASX, AIM and BSE listed company focused on generating cleaner power in Botswana for supply into the local and regional power markets, received the Electricity Generation License formal certificate and accompanying conditions from Botswana Energy Regulatory Authority (BERA). The licence has a term of 15 years, is for the generation of 2 MW of CBM gas and solar power generation at the Lesedi project for sale to Botswana Power Corporation (BPC) at the approved BPC tariff, as well as a series of standard conditions. (Tlou) 3 COMPANY Price (BWP) EPS P/E Hist P/BV Hist Net Div Div Yield ROE ROA Recommendation BANKING SECTOR ABC 2.00 0.17 11.91 1.35 0.03 1.30% 11.32% 1.34% HOLD Absa 5.45 0.61 8.92 2.09 0.35 6.43% 23.42% 2.77% HOLD FNBB 2.40 0.31 7.83 1.74 0.16 6.55% 22.24% 2.93% HOLD StanChart 1.39 0.18 7.56 0.37 0.25 17.95% 4.95% 0.35% BUY BBS -0.05 N/A N/A 0.00 N/A N/A SPECULATIVE OTHER FINANCIAL SERVICES Afinitas 0.99 -0.05 NA 3.15 0.00 0.00% -15.28% -14.37% SPECULATIVE BIHL 17.50 1.56 11.22 1.69 1.14 6.51% 15.05% 2.67% HOLD Letshego 0.72 0.32 2.23 0.34 0.11 15.42% 15.10% 6.36% BUY FMCG Sefalana 9.09 0.83 10.91 1.28 0.35 3.82% 11.77% 7.12% BUY Choppies 0.69 N/A N/A N/A 0.00 0.00% N/A N/A suspension CA Sales 3.77 0.31 12.08 1.71 0.06 1.55% 14.13% 6.66% HOLD AGRICULTURE SeedCo 2.62 0.09 29.95 1.18 0.04 1.37% 3.93% 2.04% REDUCE BREWERIES Sechaba 21.60 1.65 13.12 3.79 1.02 4.71% 28.88% 27.38% HOLD TELECOMMUNICATIONS BTCL 0.89 0.15 5.85 0.44 0.09 9.67% 7.60% 6.17% BUY PROPERTY DEVELOPMENT Letlole 2.33 0.18 13.25 0.86 0.16 6.93% 6.49% 4.57% BUY NAP 3.23 0.32 9.99 1.26 0.23 7.05% 12.66% 11.15% HOLD PrimeTime 2.92 0.24 12.09 0.90 0.09 3.18% 7.46% 3.45% HOLD RDCP 2.24 0.36 6.21 0.68 0.12 5.27% 10.91% 5.48% BUY FPC 2.40 0.26 9.24 1.08 0.16 6.60% 11.68% 6.96% SELL Turnstar 2.80 0.20 13.78 0.97 0.17 5.95% 7.02% 4.60% HOLD CONSUMER SERVICES Engen 10.37 0.81 12.82 2.55 1.01 9.72% 19.91% 12.13% HOLD G4S 3.40 0.25 13.52 2.61 0.13 3.69% 19.30% 12.31% HOLD TOURISM AND HOSPITALITY Cresta 1.35 0.19 7.15 1.17 0.00 0.00% 16.39% 5.64% BUY Chobe 11.00 1.09 10.10 2.63 0.00 0.00% 26.02% 18.27% HOLD Market Average 10.94 1.54 5.38% 12.77% 6.18% DIVIDEND SCHEDULE Gross Dividend Gross interest Last day to Declared Period (thebe) (thebe) register Payable RDCP 23 Mar 20 Final 0.072 2.065 14 Oct 20 28 Oct 20 Engen 16 Jun 20 Special 31.40 02 Jul 20 06 Jul 20 NewFunds 18 Jun 20 Monthly ZAR 16.1010 cents 26 Jun 20 29 Jun 20 4 RATINGS Company 19 Jun 20 26 Jun 20 Volumes Value % change YTD % change Mkt Cap (BWP Mn) Mkt Cap (USD Mn) DOMESTIC BOARD ABC 2.00 2.00 - - 0.00% -0.99% 1,450.00 123.54 ABSA 5.45 5.45 3,628 19,773 0.00% -0.91% 4,644.28 395.69 BIHL 17.50 17.50 114 1,995 0.00% 0.00% 4,941.49 421.01 BTCL 0.89 0.89 193,942 172,608 0.00% -6.32% 934.50 79.62 Chobe 11.00 11.00 20 220 0.00% -0.90% 983.84 83.82 Choppies 0.69 0.69 - - 0.00% 0.00% 899.50 76.64 Cresta 1.35 1.35 - - 0.00% 0.75% 249.26 21.24 Engen 10.37 10.37 10,284 106,645 0.00% 0.00% 1,656.32 141.12 FNBB 2.40 2.40 16,084 38,602 0.00% -15.79% 6,104.88 520.14 FPC 2.40 2.40 - - 0.00% -2.44% 1,023.67 87.22 G4S 3.40 3.40 - - 0.00% -2.86% 272.00 23.17 Letlole 2.33 2.33 - - 0.00% 3.56% 652.40 55.58 Letshego 0.75 0.72 1,296,357 934,221 -4.00% 1.41% 1,543.71 131.52 Minergy 0.85 0.85 - - 0.00% -22.73% 399.48 34.04 NAP 3.23 3.23 - - 0.00% -0.31% 1,952.20 166.33