Far Property which launched in the Botswana Stock Exchange (BSE) this Wednesday is expected to boost the market capitalisation in the local bourse.

BSE Chief Executive Officer, Thapelo Tsheole said yesterday at the launch that Far listing brings some level of diversity into the market by increasing the number of property companies listed in the BSE. “It also brings diversity within the sector by being the 6th property company and operating within the space it is operating in. It’s a good development mainly by the two shareholders, Farouk Ismali and Ramachandran Ottapathu by developing the market and this country- this gives citizens to enjoy the wealth being generated by the brains of these two gentlemen, it’s a real economic empowerment,” shared Tsheole. 

The youthful CEO said this is a very exciting time for the BSE, “as it brings the market capitalisation to more than P5.4billion because the property sector was 11 percent of the domestic market capitalisation of the P49billion, now it will be over that. We’re looking forward to increasing the turnover which I think in April was very low but on year-to-date basis we have traded close to P816million slightly less than a billion. Our aim is to surpass the P3billion reached last year and with coming into the market of companies such as Far Properties, we’re looking to increasing the present daily turnover of P9.8million as of end of April.”

The number of listed companies in the domestic board will increase from 23 to 24 and this is the second listing in a year following that of BTCL beginning April. “It might seem as a small number but majority of stock exchanges in Africa have zero/nothing. We are excited because we seem to be taking at least more than one. This will bring into addition the total number of listed in the BSE to 34, 24 domestic and 10 foreign companies, 38 bonds, four exchange traded funds,” he added.

He said that Far’s listing was testimony that listing is not a bad thing, because if it were, Ram and Farouk would not be coming for the second time in the BSE. In fact listing is a good thing to do because companies listed in the BSE are the cream of the Botswana market those listed in the stock exchanges in the world are some of the best in the world. “Welcome to the crème de la crème of Botswana’s corporate companies.”

For his part, one of the Directors and a major shareholder, Ottapathu said “It was not a humble beginning. It was all scattered companies in 2010 and we consolidated them into a group company. From there the growth was fast, we could go to the valuation level of a billion plus in five years. The board members then gave it the green light to go on the stock exchange.”

Ram shared in passing that, “there is more listing to come before I retire. Watch the space.” However, the Choppies group CEO indicated to BG Business that there are no plans yet for the newly listed entity to list in the international stock exchanges.

The first annual Youth Business Expo (YBE) whose core objectives are to expose youth entrepreneurs to networking and create a marketing platform for their products will be held in Gaborone from 24th - 29th May.

In an Interview Policy Specialist at the Ministry of Youth, Sport and Culture (MYSC) Lawrence Ookeditse said that YBE is meant to expose youth entrepreneurs to new business trends as well as to give the youth an opportunity to network and come up with sustainable linkages. Ookeditse stated that the theme of the Expo - ‘Where Young People strive for success,’ - augurs well with YBE’s goals.

He said the theme sums up what their initiatives are about which is the success of young entrepreneurs. “We are all about youth development. They (youth) would also be at an advantage of meeting up different investors and we will also have testimonies from people who have made it so that they encourage them,” said Ookeditse The Youth Business Expo is expected to bring 300 different young entrepreneurs under the age of 35.

The interested entrepreneurs are to register at MYSC offices and booking a stall is free.  The expected sectors to exhibit are tourism, manufacturing and agriculture among many others. The weeklong expo will include seminars and conferences to educate youth entrepreneurs on branding, penetrating regional and international markets.

Botswana Stock Exchange listed furniture shop, FurnMart recorded 89.3 percent decline win profits in its half year ended January. 

The profits were materially affected by the weakening of currencies in South Africa and Namibia. The group recorded P4. 4 million profits compared to P40 million recorded in the same period last year. Revenue amounted to P 6222.2 million, a decrease of five percent while the operating income of P75 .1 million was 1.3 percent lower than the prior period. Commenting on the published results, Furnmart Chairman, John Mynhardt said the difficult trading conditions in the region and the currency fluctuations have had an impact on the results with South African credit environment remaining a challenge.

“The exchange loss of P45.2 million compares to an exchange profit of P3.9 million in the previous year. The exchange loss was caused by the weakening of the group’s, other functional currencies during the period under review,” said Mynhardt. He said the gross profit margins were maintained for the period under review despite difficult trading conditions, higher product inflation and currency weakness. “Operating expenses were in line with the previous year.

The quality of the debtors’ books on the whole has been maintained,” said Mynhardt adding that the impairment provisions have remained at similar levels. He said the shifting landscape in South Africa with regard to the furniture industry and the regulatory environment around consumer credit is closely monitored and the group remains well positioned to respond to the changes.

The group expects the trading environment to remain similar during the remainder of the 2016 financial period as consumers come under further pressure from rising inflation, slow economic growth, job losses and interest rates increases. Mynhardt said the material weakening of the Zambian Kwacha is a concern. However he said the group will continue to trade cautiously in Zambia. Furnmart, through its Home Corp store has operations in Botswana, Zambia and Namibia with a distribution centre in South Africa.

Orange Botswana has launched the 2016 edition of the annual Orange Social Venture Prize. The annual competition is in its 5th edition with this year’s competition running from 18 May 2016 until 21 September 2016.

The Orange Social Venture Prize is aimed at serving development by stimulating innovation. This is done through showcasing entrepreneurs offering innovative products or services that meet the needs of Africans in fields such as health, agriculture, education, energy, industry or trade.

Over the past five years, 2000 projects have been submitted for the Orange African Social Venture Prize, reflecting the dynamism of African entrepreneurs and the potential of the telecommunications sector in Africa. Through this initiative Orange aims to be the digital partner of startups in Africa and the Middle East.

According to Orange Botswana Foundation and PR Manager, Boga Chilinde-Masebu, the project aims at promoting social innovation for development, thanks to information and communication technologies. “By promoting social ventures, Orange aims at raising awareness about the role that Information and Communication Technologies can play in development,” she stated. Four projects or enterprises addressing needs of the bottom of the pyramid market in Africa and the Middle East through technology will be rewarded.

The digital projects may range from e-health and mobile banking to digital and mobile applications for education or agriculture. In addition, the winning project should represent huge opportunities for social development. To enter the competition participants must be more than 21 years old, they can either be students, entrepreneurs running companies with no more than three years on the launch day of the competition.

“We insist on participants being newly formed businesses because one of the major objectives of this initiative is to support startup companies in our affiliate countries. With that in mind, proposed projects must target an Orange affiliate in Africa and the Middle East with their core business using technology in an innovative way to enhance living conditions of local populations,” said Chilinde-Masebu. The applications forms are available online (entrepreneurclub.orange.com/eng).

Gaghoo mine, a local mine owned by Gem Diamonds will this year reduce its production plan to approximately 300 000 tonnes.

Output from the company’s Ghaghoo mine dropped five percent to 11, 029 carats after the miner said in February it considered it prudent to scale back the operation as average selling prices fell. In its first quarter trading update Gem Diamonds Chief Executive, Clifford Elphick said production slowdown and cost reduction plan is implemented with the downsizing of the operation advanced. “At Ghaghoo the downsizing of the operation is advanced and the buffer zone around the sand ingress has been successfully created.

Development of the second production block on Level 1 has progressed well and will be the main source of ore for the remainder of the year,” he said. A parcel of 14 114 carats of Ghaghoo diamonds was sold during the period for an average of US$ 160 per carat, which is seven percent above the previous price achieved in December 2015.

Elphick said although Ghaghoo will operate at a reduced production rate during 2016, prices for the Ghaghoo production will continue to be monitored and the option of returning to full production regularly reviewed. The Ghaghoo operation recovered 11 029 carats achieving a recovered grade of 21.8cpht. The majority of the 50 514 tonnes of ore treated was sourced from tunnels one to five on Level 1.

The area of the pipe mined was close to the contact and contained more internal dilution and hence delivered a lower grade when compared to the previous quarter.  The development of the second production block is progressing well with over 200 metres of tunnelling completed per month, which will allow access to higher grade ore towards the centre of the pipe from mid year onwards.

The beginning of 2016 has seen an improvement in rough diamond demand following a positive holiday selling season in the United States last year, the group’s latest diamond market update shows.

De Beers’ Group Executive Head of Strategy and Corporate Affairs, Gareth Mostyn told the media this Wednesday in Gaborone that they continue to take a cautious approach in light of the fragile macroeconomic environment. DeBeers, a member of Anglo American group and the world’s largest diamond company has seen its global growth declining by 13 percent in the US dollar terms, largely as a result of the macroeconomic weakness in emerging markets and the strength of the US dollar.

Looking back, slightly weaker than expected sales over the 2014 holiday season in the US and a slowdown in growth in China led to reduced purchases by retailers and hence left the midstream holding higher levels of inventory. This led to a significant decline in rough diamond demand in the second half of 2015 as the midstream sought to rebalance the polished/rough inventory situation.

To date, the US remains the world’s largest market for diamond jewellery sales and increased its share of global polished diamond demand from 42 percent to 45 percent in 2015. India consumer demand reduced by four percent in local currency as it was impacted by a decline in overall consumer spending; whilst the Japanese consumer demand was broadly flat in the local currency terms, but the Yen depreciation led to a 13 percent decline in the US dollar terms.

Demand in the Gulf region declined three percent with oil price weakness and low visitor numbers affecting growth. Chinese growth was positive in 2015, as it saw an overall growth rate of three percent. “We remain very positive despite the volatility. What happens in the short term will be driven by the market trends. The US is again expected to be the main driver of growth in 2016 as well as the growth of the middle classes in emerging markets,” said Mostyn.

He said the company did some segmentation in the US and realised that the millennials still do love jewellery just like the elderly people. “What we need to do is to continue doing more marketing campaigns to the millennial generation and ensure that the demand is simulated. We still remain hopeful in the millennial for demand of our diamonds jewellery,” said the hopeful Mostyn. 

South East District Council has offloaded issues of economic diversification in the district to their newly established company, BBTN that will see that it generates revenue on behalf of the council.

The Council Chairperson, Phenyo Segokgo, launched the business arm of the district last week, explaining that he said the district has at last achieved its long-term dream to have a vehicle that will take care of council investments, as well as to generate income. Speaking at the launch of the investment company, Council Chairperson Phenyo Segokgo said BBTN will relieve the administration the burden of running the district and at the same time generating money to run the district. “This has been on the drawing plans for some years, and I had to make sure this project is up and running before I leave office.”

The district will further reduce too much dependency on dwindling government funds. “This financial year 2016/17 our Revenue Support Grant (RSG) is P124 million and with such, we can’t go as far as we wish to achieve developments we want in the district”, he said.

He disclosed that being near Gaborone, South Africa and Lobatse the district has many business opportunities that can attract serious investors, which investments can in turn generate income and create jobs to reduce unemployment in the district. “Some of the projects we have in the pipeline is to set up Central Business District in Ramotswa, Amusement Part with lodging facilities, Sky Diving and water sports in Mogobane, Tourism activities in Otse, Student lodgings in Tlokweng and a shopping Mall, as well as other projects that will be conceptualised”, he noted, urging the business community in the district to be part of the development strategy that can help BBTN.

Speaking at the same occasion, Rev Mpho Moruakgomo, who is the President of Botswana Association of Local Authorities (BALA) commended the council for the establishment of an investment arm, adding that district has joined the likes of Kweneng, Southern and others in economic empowerment drive of their respective districts.Moruakgomo said with the proximity of the district to Gaborone, there is very good potential of good success rate because the city is congested and setting up projects in the district through BBTN could offload a lot of burden from Gaborone.

Barclays Bank Managing Director, Reinette Ven Der Merwe said they see a significant opportunity to grow the retail banking business despite depressed consumer demand.

In a recent annual report, the BSE listed lender told shareholders that they have managed to significantly improve business in the second half of the year. According to the report, within the retail banking sector, which includes agriculture, tourism and franchising, assets grew to 50 percent largely driven by loans to the agriculture, retail and tourism sectors.

“The retail business registered strong growth in primary customers’ number of accounts and customer loans, while deposits were relatively flat,” said the report. Meanwhile, the bank, which boasts a market capitalisation of nearly P4 billion, noted that retail unit was not without problems.

Some of the scheme loans under-performed due to depressed economic activity in the mining sector.  These impairments did not deter the bank to continue lending to deserving customers. The bank, which has unleashed multi-million Pula advertising campaign for its various products and services continues, invests in digital technology and innovation to improve customer experience. The bank is confident that its improved operational tactics will see them sail through this year. Like most commercial banks, Barclays is emerging from a liquidity squeeze, which nearly brought the whole sector to its knees in the past two years.

According to the annual report, Barclays is well funded. It has a balance sheet of P14.6 billion.  During the year under review, the bank rolled out intelligent ATMs (iATMs) to improve retail banking business.  The iATMS enable customers to deposit cash and to send cash. In the same annual report, Barclays Chairman, Rizwan Desai said in order to combat challenges affecting the banking sector, they have identified a number of initiatives that are tailor-made for the market.” We have identified diamond beneficiation, mining tourism, and premium property investments as some of the areas we want to focus on,” said Disai.

He said the basis of being selective in the market is to stay ahead of the curve given emerging constraints in the market. “We believe that our corporate and investment Banking offering is what will drive us to be the bank of choice,”

The closure of mines in Botswana had placed emphasis on the absolute necessity for low-cost mining production, Econsult Botswana MD Keith Jefferis said on Wednesday.

“If we think we can continue as a mining country without being a low cost producer, that will be a big mistake,” economist Jefferis told the Botswana Resource Sector Conference. Botswana Chamber of Mines CEO Charles Siwawa spoke of the need for the reopening of closed mines to be predicated on the new owners bringing the operations down the cost curve.

The real challenge was to ensure that mines could survive in tough times to enable them to thrive in times of plenty. Drawing attention to the precarious state of a still-operating Botswana nickel mine, which was struggling to produce at the correct cost level, Jefferies said the many mines that had closed in recent years highlighted the lack of focus on low cost production. “Being a low cost producer is absolutely essential,” he emphasised. Copper and nickel had a dismal 2015 on the smelter closure at BCL and the closure of two copper mines.“2015 was a bad year for mining,” the economist commented.

The generation of new jobs was hugely challenging with only 1 000 new jobs created for 40 000 students coming out of the education system.“Mining won’t solve the unemployment problem,” he said, adding that jobs would have to come from elsewhere. Tourism is now completely eclipsing copper and nickel, which were once Botswana’s second largest source of export revenue. The barriers to seaborne coal export would require a big ramp up of the rail, but the $15-billion investment needed was not likely to be made at current low coal prices and general uncertainty around coal.

There had been over enthusiasm over coal, which could not replace diamonds as the margins and profitability of even a large coal industry would not generate anything like the volumes that diamonds had generated. Fortunately, diamond production looked set to continue at 25-million carats a year for two decades, but with an outlook of diminishing profitability.

Mining weekly

Brewers of St.Louis and Shake Shake, Sechaba this week reported improved profits year-end financial results even though the company is operating under a tough economic environment and the imposed Alcohol Levy. 

In its financial performance for the year ended 31st March 2016, the company led by Johan de Kok has recorded a 7, 8 percent profit for the year realised. This makes it P201, 9 million from P186, 1million realised in the previous year.  “This was due to the combination of volume growth from clear beer, alcoholic beverages, sparkling soft drinks categories and selective pricing, improved brand, pack mix and focus on production and distribution efficiencies,” reads de Kok’s financial statement.

According to the statement, Kgalagadi Breweries Limited, an associate of Sechaba Brewery Holdings, has seen a drop in volumes. Total volumes for the year ended were 0, 2 percent below prior year from 2.217.8 hectolitres (hls) to 2.212.6 hls. Clear beer, alcoholic fruit beverages and sparkling soft drinks showed growth, while traditional beer and non-alcoholic beverages category declined. This decline was attributable to water and power shortages and continuing impact of the traditional beer regulations. The company has since declared a final dividend of 69 thebe per share and it was paid on 13th May 2016. 

Barclays Africa group is planning to spread its wealth management and insurance services to Ghana, one of Africa’s leading economies, a development which will signify their commitment to offering non-bank financial services to the rest of the continent in the coming years.

This latest information was shared by Barclays Africa group Managing Director, wealth management and insurance, Lanz Zulu at an event which marked Barclays Botswana Life’s five years of existence in Botswana. “Ghana (Barclays) is one of the best performing banks within our group. It makes business sense to start offering our investment and wealth management services,” said Zulu in response to BG Business questions.

All things being equal, the Johannesburg Stock Exchange (JSE) listed lender will make its debut appearance in Ghana’s wealth insurance and wealth management business in the next six months. Barclays Africa already has presence in Ghana. The subsidiary offers personal and corporate bank, to name but a few. It is highly likely that the looming expansion of Barclays Africa (wealth management and insurance) will be embedded within Barclays Ghana, as it has been the case with other subsidiaries. Zulu explained that by integrating all their banking units offers a competitive edge and assures them of clients.

BG Business understands that, once the Ghana wealth and insurance unit is established, next on the radar will be Botswana. The diamond-rich country is one of the best performing subsidiaries outside South Africa. Speaking at the same event Botswana Life Managing Director, Motshabi Mokone told guests that they have managed to operate successfully despite trading under an economically challenging environment.

In the past five years that they have been in existence, Barclays Botswana Life has managed to sit comfortably at the top three position in the life insurance industry. “This could not have been possible if it was not for the hard work of staff and indeed our customers,” said a content Mokone. Meanwhile, Zulu painted a rosy picture of the group going forward, despite the announcement that its parent, Barclays plc is pulling out of the company.

In March, the London-based banking group caught the market by surprise when it announced that it will sell its 62 percent stake at Barclays Africa. Zulu has reiterated that the bank is here to stay, and their continued expansion into Africa is testimony to that. For the year ended December 2015, Barclays Africa reported a 10 percent increase in profit. During the period headline earnings increased by 10 percent to R14 287m from R13 032m in its financial results ended 31 December 2015.

De Beers reported a $73m reduction in revenue from its fifth sale of rough diamonds in 2016 because of “seasonal demand patterns”, bringing total sales so far in 2016 to $3bn.

It sold $560m worth of diamonds to handpicked clients, called sightholders, and through auctions in its fifth sale event of 2016.”Sales in the fifth cycle of the year were somewhat lower than in the fourth cycle, in line with our expectations and typical seasonal demand patterns,” De Beers CEO Philippe Mellier said.

JP Morgan Cazenove analysts said the $3bn in diamond sales for the first half of the year represented 64 percent of their forecast for full-year sales, and was 22 percent higher than their expectations for first-half sales. De Beers, which is 85 percent owned by Anglo American, reported a peak of $666m in sales in April.

The largest producer of diamonds by value recorded sales of $248m in December 2015, a particularly difficult period when the market was clogged with too many rough diamonds, weak prices, and sluggish demand for diamond jewellery. De Beers and its peers, such as Russia’s Alrosa, the largest producer by volume, held back diamonds by either slowing production, closing mines, or withholding production from sale.

That strategy, combined with price reductions of more than 15 percent in 2015 for rough diamonds by De Beers, had assisted the market to a more “normal” operating environment, Mellier said in May. “Rough diamond demand and polished diamond prices remain stable, reflecting steady consumer demand, but we maintain a cautious outlook,” he said on Tuesday.

Analysts said the overall market remained uncertain.“Year-to-date rough diamond prices have been steady, which we believe is largely a function of supply-side restraint from large producers, such as De Beers and Alrosa, in late 2015,” JP Morgan analysts said.
“Price appreciation from this point will likely also require an improvement in demand, particularly in the luxury retail space,” the analysts said. “The outlook in this category continues to remain uncertain,” they said. Business Day

PPC South Africa’s largest publicly traded cement maker, said it received R4bn of bank guarantees to underwrite the sale of shares to existing investors, adding to facilities it received last week to redeem bonds. A group of lenders including Standard Bank Group  Nedbank Group, FirstRand’s Rand Merchant Bank and Barclays’s Absa will lead the rights-offer process and provide the standby underwriting commitment, Johannesburg-based PPC said in a statement on Monday.

Standard Bank was appointed as sole global coordinator. The agreement comes after PPC on Friday announced that it obtained R2bn of guarantees from Absa, FirstRand and Standard Bank to back the early redemption of bonds. PPC is being forced to raise funds after S&P Global Ratings cut its credit rating to junk amid rising debt due to investment in new African projects, combined with a difficult trading environment in its home market.

“The execution of the irrevocable and unconditional guarantee in favour of note holders as well as the signing of the standby underwriting agreement are two major milestones,” chief executive officer Darryll Castle said in the statement. “These pave the way for the company to resolve its capital structure issues effectively, and focus its efforts on implementing its strategy going forward.” The stock has almost halved in 2016, the worst performer on the FTSE/JSE Africa All-Share Index. Bloomberg

Letshego Holdings, a micro-lending behemoth has reiterated its plans of becoming a truly inclusive financial services group within the continent, the head of its local subsidiary has disclosed. Speaking on Tuesday night at a function for Botswana-Kenya businessmen and women, Letshego Botswana CEO, Frederick Mmelesi said their focus is clearly aligned at assisting low to middle income earners, who have been excluded by the financial system for years especially in Africa’s rural areas.

This is the plan that Chris Low and his executive committee will put much emphasis on going forward. “Through a broad-based financial services offering underpinned by innovation and an inclusive finance agenda, we work to deliver simple, appropriate and affordable solutions to empower fellow Africans who are typically underserved or unbanked,” Mmelesi told the event which was attended by business CEOs and diplomats from Botswana and Kenya respectively. The Letshego Botswana top executive, who has been with Letshego from day one, stated that one such example of financial inclusion is their low income housing finance offering.

The product is already a hit in Kenya, the biggest economy in Eastern Africa, where it has a portfolio of $20 million (P200million). The company has already started rolling the solution (low income finance product) to Botswana market and early signs show that demand will increase in the foreseeable future. Letshego Group Head of Corporate Affairs, Mythri Sambasivan-George said in an earlier engagement with BG Business. BSE listed Letshego, which has operations all over Africa, currently boasts a customer base of 300,000 borrowers and 100,000 savers. On another note, Mmelesi told the audience that, Letshego Kenya, which was opened some eight years ago, is the fastest growing subsidiary in Kenya providing credit services to small and micro-entrepreneurs, salaried employees, and civil servants. It was formally called Micro-Finance Africa. 

Letshego, which will later this month (July) celebrate 18 years of existence, said its robust growth in Botswana and Kenya has been up-scaled by the healthy relations between the institution and governments of the two former British colonies. The Tuesday networking session also had speakers from Kenyan government. The function was done as part of a three-day visit to Botswana by Kenyan President Uhuru Kenyatta this week. During his stay in Botswana, Kenyatta, the son of founding President Jomo Kenyatta and his counterpart President Ian Khama discussed pertinent issues surrounding their socio-economic relations that span decades. The Kenyan President left on Wednesday morning.

A black-and-yellow dump truck rumbles up from a giant pit in the mountains of southern Africa, carrying a load of freshly blasted slate-gray rock from the Letseng mine. With luck it will contain a golf-ball sized diamond worth perhaps $20-million.
With even more luck the stone won’t get smashed.

Keeping giant gems intact during the mining process is a challenge for the two companies that account for most of the global production of these multi-million dollar whoppers. They’ve unearthed 15 of the 20 largest diamonds found in the past decade. Almost every one lost a chunk at some point in the process, including a stone called the Lesedi La Rona that is the largest found in more than a century.“Since the time of the caveman mining hasn’t changed much. You pulverize the rock and take out what you want,” said Clifford Elphick, CEO of Gem Diamonds, which runs Letseng.

“That’s fine in the metals business, but in the diamond business it’s not an appealing technique.”Gem Diamonds, which operates Letseng in the small kingdom of Lesotho, and Lucara Diamond, which opened its Karowe mine in Botswana in 2012, are in a very different business from De Beers, the world’s biggest producer. With large stones their core business, rather than an unexpected windfall, they’re trying new scanning technologies to reduce accidental breakage.Back at the mine, Thaabe Letsie watches the truck ascend the opencast pit under a clear winter sky, pauses from directing four drilling machines and says the mining process is a long way from the glamour of the end product.

“Somebody is over there in Hollywood or wherever shining with what I produce,” said Letsie, 43, wearing a scarf beneath his hard hat and a fleece-lined fluorescent yellow jacket to protect him from the zero-degree Celsius temperature and icy winds. “But something has to start somewhere. It’s not pretty work.”But it’s thorough. The diamond-bearing rock, known as kimberlite, is drilled, blasted with explosives, hoisted and hauled around the mine and plant and crushed repeatedly in order to pry the gems from inside rocks that can be up to a metre square in size. The Letseng mine produces just 1.6 ct of diamond (a carat is 0.2 g) for every 100 t of rock.

That means each giant dump truck, on average, hauls out less than a small engagement ring’s worth of gems. By contrast, there are 130 ct a hundred tons at De Beers’ Jwaneng diamond mine, the world’s largest.The things that makes it worth the hunt at Letseng are the sheer size and quality of its stones. Its average value of $2,299/ct is the highest in the industry, according to Gem Diamonds’ earnings released in March. The De Beers diamonds sell for $207/ct, on average.Just last week, prices for the giant stones took a hit when Lesedi La Rona, the massive diamond found by Lucara, failed to sell. It had been tipped to fetch $86-million, based on prices paid at a sale in May, but the highest bid at the Sotheby’s auction was $61-million, below the reserve price. The offer was still the second-highest ever for a rough diamond.

The world’s biggest and rarest diamonds have proven more resilient than smaller stones. Prices for rough diamonds slumped 18% last year, the most since the financial crisis in 2008, amid lower demand and an industry-wide credit crunch.Gem Diamonds resurrected the Letseng mine in 2006 following De Beers, which had closed it in 1982 amid a downturn in diamond prices. Run by ex-De Beers staffers, including Elphick, the company since then has waged a constant battle to reduce the number of large stones it breaks.
“We’ve made important inroads, but we certainly haven’t solved the problem because we’re still using using the same basic technology,” said Elphick. “What will solve this is a massive technical breakthrough.

That is the holy grail for us.”
Before joining Gem Diamonds, Elphick oversaw the investments of South Africa’s Oppenheimer family, who founded Anglo American in 1917 and transformed De Beers into the world’s biggest diamond producer.Last year, Gem Diamonds introduced so-called XRT scanners, which can identify loose diamonds from a conveyor belt of rubble and move them to a secure area for processing.While X-rays have been used to identify diamonds since the 1970s, it’s only in the last few years that computer-processing power has become sophisticated enough to analyse the sheer volume of rubble generated from mining. XRTs are also more adept at picking out the more valuable diamonds because they can analyse stones’ chemical composition rather than simply their ability to reflect light, which is used in the older scanners.Gem Diamonds is currently considering introducing XRT scanners earlier in the process, before the mined rocks are crushed, to minimise the risk of breaking them, according to Alan Ashworth, who stepped down as chief operating officer last week.

“We suspect there is the odd 1 000-ct diamond contained within the ore body,” he said. “But you never know when the diamond is going to be liberated.”The company recovered a dozen diamonds bigger than 100 ct last year, compared with just four in 2012. Still, all its giant gems have had chunks broken off, including a 357-ct rock that sold for $19.3-million last year, and this century’s third-biggest stone, the 603-ct Lesotho Promise, unearthed in 2006.Some of those breaks can be fortuitous. Lucara says that had they not broken a 374-ct chunk off their 1 109-ct stone it would have been crushed to pieces in a plant not designed to take such big stones.“When people say you broke a 1 500 ct diamond, I say we recovered an 1 100 ct diamond,” Lucara CEO William Lamb said.
“The words ‘mining’ and ‘gentle’ don’t go very well together.”

[Mining Weekly]

The Chairperson of the Botswana Telecommunications Corporation Limited (BTCL) board, Daphne Matlakala has announced the adoption of new management reform strategies as per the interest of its shareholders.Matlakala said the journey that the company has travelled so far has not been any easy one, as it faced a lot of hurdles which they are working out to overcome.

“The BCTL of yesteryear is slowly becoming a thing of the past because we now have a larger shareholder base and interests that we have to serve,” said Matlakala last week at the announcement of company financial results for the year ended March 2016.  Matlakala assured the minority shareholders that they would cater for their needs despite the government being a major shareholder.   “There are those who are worried that the government is still the major shareholder with 51 percent shares but the management is very clear about the interests of the shareholders across the board. The minority shareholders’ interest are going to be considered and taken on board,” the board manager.She added that the management is set to transform the company into a more customer centric business entity.

“We want to assure all that we know our story and we have a plan going forward,” she said. Asked about the rationale behind not renewing the managing director, Paul Taylor, contract, which ends on July 19, at a time when the company has new shareholders, Matlakala said, “the board has applied its mind to this issue and decided to allow someone to take over the company. To many people, it does not look like a very wise decision to change the MD at this critical stage,” Matlakala said and added that Taylor was brought for a specific mandate to list company on the local stock exchange.

“Mr Talylor has been working with a competent team and I believe the board has always been there to provide all the direction to the company to be listed. When Paul came in, he really put a lot of effort, energy and knowledge to share with the rest of staff particularly the committee that he has been working with”.Meanwhile, the BTCL  annouced sharp loss of P371 million in its maiden full year results  up to March 2016.

According to the company’s financial results for the year ended March 2016, the loss was due to impairment exercise that happened this year. However, the group was quick to assure its now thousands of shareholders that all is not lost and they will bounce back as a multi-pronged strategy was in place to ensure the company is well placed for the future. A carefully crafted statement from the country’s biggest telecommunications group by any measure reads that an impairment amount of P522 million represents a write-down of some of the property, plant and equipment due to technology changes, which is in line with global trends.

Letshego Holdings Limited, the Africa-focused micro-lender has been granted a full commercial banking license for its subsidiary in Namibia, the company said in an emailed statement on Thursday afternoon. Before the application was given the thumps up this week, Letshego Namibia was operating with a provisional banking license that it was granted two years ago July 2014.

The approval now means, Letshego Namibia will now offer comprehensive financial services in the country. In Namibia, Letshego will now go pound for pound with other established banks such as Bank Windhoek and Standard Bank. Chris Low, the group Chief Executive of the latest development, which further cements its position as a truly diversified financial, services group.

“This is an exciting moment for Letshego and confirms our commitment to deepening financial inclusion across the continent. We are dedicated to providing accessible financial services to those that are under-served by traditional banks - obtaining a banking license in Namibia means we can expand our services to those that need it most, helping bring to life the aspirations of the Namibian public,” he said. Even Letshego Namibia Chief Executive cannot hold her excitement. “Our strategy will continue to focus on leading the development and provision of inclusive finance that encompasses broad based financial services,” said Ester Kali.

Letshego Namibia serves over 50 percent of the Namibian civil service who will now benefit from its deposit-taking, and broader, services. Further it supports the National Harambee Prosperity Plan, which states ‘the most effective way to address poverty is through wealth creation’ and actively ensures its business strategy and mandate positively aligns with this.

Botswana based financial services institution, Letshego Holdings Limited last week celebrated an eighteen year history of growth, diversity and improving lives across its 10 country African footprint. Today it prides itself as the largest indegenous company in the Botswana Stock Exchange by market capitalisation.

Letshego’s history
Letshego was incorporated in March 4, 1998 as Micro Provident Botswana Limited, a microfinance institution whose core function was to provide  unsecured loans to clients. It then commenced trading in September 1998 and eventually listed in the Botswana Stock Exchange in 2002 through a successful initial public offer with an aim to go on regional expansion. The company started with an establishment of a small team of 30 professionals in Gaborone issuing loans of up to P1,000.
Today the group employs over 2,300 team members, across more than 20 nationalities.
Letshego is a Setswana word meaning “support” that epitomises the group’s ability to partner with individuals as well as micro and small enterprises (MSE) through provision of financial services. Since September 2002, the company  has been dealing directly with its clients who are mainly employees of the central and local governments, parastatals or quasi government and some private companies. Today Letshego is the largest indigenous company on the BSE by market capitalisation in excess of US$634 million as at 31 December 2015 and profitability in excess of US$104 million profit before tax for the full year 2015. The company currently ranks among the top 40 market value sub-Saharan Africa companies excluding South Africa.
The group has more than 250,000 consumers being served by its micro lending subsidiaries across ten countries in Southern and East Africa. These subsidiaries provide short to medium-term unsecured loans to formally employed clients.

Letshego’s regional presence
Between 2005 and 2007, the group expanded to Uganda, Swaziland, Tanzania and Zambia. These were all through greenfield investments in these countries. In August 2008, the group made its first foreign acquisition when it acquired a majority stake in Eduloan, an MFI in Namibia. In the same year, the company adopted the Letshego brand as its official name. The expansion drive continued into 2009 with the setting up of a subsidiary in Mozambique.
In 2011, the group commenced its operations in Lesotho. In the same year, the group announced its intention to acquire a 62.52 percent in Micro Africa Limited, a Kenyan based MFI with subsidiaries in Kenya, Uganda, Rwanda and South Sudan. This acquisition gave the group access to three new countries and an increase in its Ugandan customer base due to its existing presence. This acquisition was completed on June 1, 2012. This saw the group having presence in 11 countries. Letshego Holdings took full control of Micro Africa Limited in 2013.On December 1, 2013 the group divested from Letshego Financial Services Zambia. This saw its exit from Zambia reducing the group's presence to 10 countries.

Letshego’s current loan book
As from 31st December 2015, Letshego evidenced strong growth, performance and returns to shareholders with a number of firsts recorded.Net advances exceeded P6billion, total revenues exceeded P2billion and profit before tax crossed the P1billion mark, making it the largest indegenous company on th BSE by market cap.

Financial inclusion goals
Letshego continues to embrace financial inclusion; this includes responsible lending practices and encouraging productive use of loans.The group highlighted that they have completed research indicating the social impact it had achieved across its markets pointing to loans being used for education, health, business, or livelihood purposes. In markets such as Mozambique, for example, this figure is at 70 percent, while Tanzania, Uganda and Rwanda see 60 percent each.Speaking at the anniversary last week, the group’s Managing Director, Chris Low emphasised that since 1998, what has set the company apart from the rest of other financial institutions is their deliberate positioning and clear focus to cater for those who conventional institutions see as “risky”. “We are humbled by, and proud of our invaluable niche that has improved lives by servicing hundreds of thousands customers, that in turn has positively impacted their families and their communities. Through our assistance to the underserved, we are grateful to have contributed towards Africa’s development.” Low highlighted that Letshego is focused on strategic partnerships to accelerate execution capabilities.As an example, new innovative financial solutions piloted by the business currentlyinclude micro insurance, agriculture supply chain financing and asset financing. Also, he shared that Letshego has done well in servicing the renewable energy industry through the provision of big loans for farmers, water tank loans, and energy efficient ’jiko’ stove loans and solar power loans – all of which they are working to roll out beyond the East African region.

What does “coming of age” symbolise?
According to Chris Low, who has been sitting at the helm for the past three years after the departure of Jan Claasen, “to me when I think back to my 18th birthday, I can vividly recollect standing on the prow of an Australian naval ship entering Sidney Harbour with the imposing architectural structure that is the Sydney Harbour Bridge ahead of me, the beautiful opera house to one side and dolphins chasing the bow waves. I was alone in that few knew my story of how I came to be on that ship, I had a sense of trepidation of what was next, yet also I had a feeling for the great things to come ahead of me – the whole world was there for taking and with my schooling and parenting, I was well placed to take advantage of the opportunities that the world presented.”
According to Low, Letshego feels somewhat the same as he did back then. “We have a vision to be Africa’s leading inclusive finance group. We have developed a strong business platform that will enable us to deliver on this intent and yet there are many challenges ahead and fast changing world from a technology perspective that we have yet to fully adopt. Success will come through our people and will require growth, an approach to diversity and a commitment to improving lives.”

Govermnet calls for private sector partnerships
Minister of Finance and Development Planning, Kenneth Matambo has stressed for the urgent need for increased collaboration between the government and private sector to drive national development. Matambo, who was the key speaker at the anniversary said, “as government, we remain committed to adopting policies and programmes aimed at stimulating local economic development. I therefore urge the private sector to take responsibility for aligning their operations with our National Development Goals so that, together, we move Botswana forward into the realisation of Vision 2036 and beyond.” 

Debswana, a leading local diamond producer has seen its quarter-on-quarter production taking a sharp decline, as demand for the world’ precious stones continue to plummet.

This is according to the company’s parent, De Beers, which reported this week that Debswana second quarter of the year (Q2: 2016) production has dropped by 19 percent. This means the Gaborone-headquartered company only produced 5,2 million carats during the period under review. The company, which is led by Balisi Bonyongo, is expected to produce about 20 million carats of diamonds this year. However, the company has taken drastic steps to keep afloat amid challenging economic conditions, which doesn’t come as a surprise to top executives when output falls. Orapa mine, which is owned by Debswana, reported a 27 percent decline in production during the period under review. Sensing the market was headed for a major fall, Debswana head honchos took a decision to put their smallest mine, Damtshaa, on a care and maintenance programme for the next three years starting January 1, 2016. Orapa plant No. 1 will also produce at reduced levels, until the market recovers.

Debswana is the biggest contributor to the overall output of De Beers diamond business. According to the unlisted diamond mining group, overall production also took a dive of 19 percent to close the quarter at 6,4 million. The company said the figures are ‘reflecting the decision to reduce production to prevailing trading conditions in H2 2015’Demand for diamond has been reduced on the backdrop of weak global economy and commodity crash that has affected big economies such as China, one of the emerging diamond markets. Despite all these hurdles, De Beers, which rivals Russia’s Alrosa said it has maintained total production at 26 -28 million carats for this year alone.

Last week, new broom at De Beers, Bruce Clear wrote in the company website that the industry must learn to thrive in uncertainty. He took over from immediate past Chief Executive Bruce Cleaver on the first day of July 2016. The future of the diamond sector presents both known and unknown challenges, said the former investment banker. De Beers’ success is predicated on every individual part of the diamond pipeline succeeding, which will require a braver approach from all partners in broadening horizons and accepting that solutions to the sector’s supply chain efficiencies and marketing strategies may lie outside of the sector itself, he added. He stressed that it would be folly to assume that the drivers of past demand will be the same drivers of future demand and reiterated Mellier’s guiding principle of the consumer being De Beers’ only source of value.

Financial management and financial literacy go hand in hand hence the encouragement for the public to manage their personal finances by empowering themselves with necessary information.

Head of Customer Channels at Stanbic Bank Botswana, Calistus Chijoro has added that the bank ensures development of value adding and relevant services and products to help achieve this objective. He stated that they have set up various digital platforms and processes to allow customers to make the most of their finances. Due to the constant advancements of technology, he said they strive to take advantage of this by improving their offerings and creating more efficient and innovative services.

“Personal financial management, though seemingly trendy more lately than ever before, has always been a key priority and indeed an absolute necessity in every community, for most financial institutions, educating the public on prudent financial management goes hand in hand with helping communities and indeed economies move forward,” said Chijoro.

He further said that managing finances is an important facet of one’s life. This he said entails everything from keeping a stringent budget to keeping record of all expenditure. Chijoro said it may sound like a lot of work but there are a lot of platforms that make things a lot easier. He pointed out that to improve efficiency, financial institutions such as Stanbic Bank have increased the digitisation of banking platforms. Electronic Banking is an avenue of banking that has allowed for more efficient, convenient and paperless processes. On the back of increased financial literacy effort, he said Stanbic bank advises the public to ensure that they use every possible means to empower themselves with more convenient and efficient banking.