Shares in the Botswana Telecommunications Corporation Limited (BTCL) ended yesterday’s trading at 96 thebe per share, dragging the stock southwards of the Initial Public Offer (IPO) price of P1 at the listing on Botswana Stock Exchange (BSE) four months ago.
Also, this means shareholders who bought the shares during the IPO will not be able to recoup their investment in full if they decide to sell the stock today.
After peaking at P1.35 per share soon after listing, BTCL has progressively softened in the past months with sellers outweighing buyers.
Market analyst, Ikanyeng Segonetso said BTCL shareholders are aware that trading in these shares has proven difficult, especially for those retail investors who want to exit their positions.
“The fact that there are too many sellers without the corresponding demand signifies illiquidity of the shares,” he said.
He noted that for the corporation’s share price to stabilise and register desirable growth, BTCL needs to set up an Investor Relations Office (IRO) in which an investor contact point will be established and robust programmes on the BTCL strategy are communicated clearly to all levels of the corporation’s investor base.
“Markets need substantial assurances delivered by the IRO and it has to be highly active in all channels of communication including, but not limited to, social media, newspapers, radio and TV, public lectures, workshops, seminars, countrywide roadshows and other channels where some retail investors can consume the much-needed information,” Segonetso said.
Motswedi Securities market researchers asserted that the newly privatised company revealed a larger than expected loss in its financial reports owing to a large
once-off impairment that saw risk averse retail investors and speculators rush to offload.
“The price dropped to under P1.10 by Monday (last week) and all the way through to negative territory, falling two thebe below IPO price of P1. It seems the five thebe dividend declared is not enough compensation for some, who could not bear to hold the stock for an extra week to qualify for the dividend,” said the market researchers.
Meanwhile, BTCL stated in a notice yesterday that government has issued a directive, which determined that the employee shares would go directly to the employee shareholders via an Employee Share Ownership Plan (ESOP) as opposed to being held in the employee share trust.
Accordingly, the company said the trust deed relating to the trust is in the process of amendment by the trustees in accordance with its terms to permit the transfer of shares directly to the employee shareholders and 19.3 million initial employee shares have been allocated to the employees who applied for them from the 52.5 million pool of shares reserved for employees.
The notice added that the initial employee shares and any other shares to be issued to employees from the five percent pool would be subject to the terms of the ESOP and applicable scheme rules, which are yet to be finalised.