The equity stake of Botswana businessman Farouk Ismail in Choppies Enterprises Limited has dropped in value by $1 million in 16 days, Reuters reported.
Choppies’ share price on the Botswana Stock Exchange has lost 9 percent of its value since the start of June, decreasing from $0.057 (R0.80) per share on June 1 to $0.052 (R0.73) per share as of press time, 2:00 pm (UTC+1).
At press time today, the company’s shares were down 1.35 percent as wary investors sold off stakes in the company in search of yield elsewhere.
The decline in Choppies’ share price led to losses for those shareholders who still remain confident in the retailer’s long-term fundamental strength.
Choppies Enterprises is Botswana’s largest supermarket chain, and one of the biggest retailers in Africa.
The group owns a centralized distribution network in South Africa, Zimbabwe, Zambia and Kenya, and sells leading international food brands, as well as its own private label products.
Choppies has grown from a single store operating under the name “Wayside Supermarket” in Botswana in 1986 to 260 stores in eight countries, with total assets valued at $171.84 million (P1.83 billion).
However, strong competition from Shoprite and Spar has seen Choppies’ retained losses over the years surge to $90.29 million (P962.57 million) as of December 2020.
This weak fundamental can be linked to the sustained decline in the market value of Choppies’ shares.
Ismail, who founded Choppies in 1986, is one of the leading retailer’s top individual shareholders, with a 15.3-percent equity stake in the company.
The recent drop in the company’s market price has seen the value of his 199,939,929 ordinary shares in the company decline by about 9 percent since early June.
The market value of his equity stake has fallen from $11.4 million on June 1 to $10.4 million at press time. This translates to a $1-million loss for Ismail in 16 days.