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Domestic Equities: Chobe the biggest gainer

Publishing Date : 25 September, 2017

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Tourism operation Chobe was the only gainer during the week under review up 9 thebe to close at a 52 week high of 910 thebe ahead of the release of its interim results for the period ended 31 August  2017.

Chobe shares are tightly held and is one of the most sought after stock on the local bourse. It’s not surprising the stock has achieved a ytd growth of 18.2% and is the second biggest gainer on a ytd basis after BTCL. The tourism operator which owns Caprivi Fly Fishing Safaris, Chobe Game Lodge, Moremi Safaries, Ker & Downey Botswana among others recently added the Dinaka Safaris (Pty) Ltd, Flavoured Properties (Pty) Ltd, Horizon Deep (Pty) Ltd and Sunbelly Ventures (Pty) Ltd into its portfolio at a cost of P56mn using internal cash resources. Flavoured Properties, Horizon Deep and Sunbelly Ventures hold an estimated 18,000 hectares of adjoining land in the Hainaveld area through leases with the Tawana Land Board, while Dinaka Safari Lodge is a 16-bed lodge and uses the 18,000 hectares of land for game activities. The lodge has been operating since 2011.

We believe this acquisition is a positive step in the right direction and will give Chobe a presence in this highly sought after diverse areas of the Kalahari, Okavango Delta and Moremi Game Reserve. The leases provide considerably more certainty due to their long term nature and this is in contrast to other leases owned by Chobe which are relatively short term.

The transaction also offers Chobe marketing and operational synergies, with no material cost increases through its existing and well-established marketing and lodge support operational infrastructure in Maun. For the week 5.4mn shares worth P15.1mn were traded, down from 30mn worth P78mn which traded the previous week. As alluded to before Chobe was the only gainer while BOD, Letshego and Primetime finished in the red. Against this background, the DCI closed the week 0.23% softer at 8,959.96 points while the FCI was static at 1,581.68 points as a loss in BOD was not enough to move the index.

(Motswedi Securities)



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