BSE stocks that will win in 2026

Good morning, let’s get into it!

Let’s continue what we started last week.

The mining sector, which historically provides approximately 70 percent of Botswana’s exports and a third of its fiscal receipts, is the intended beneficiary of the "exchange rate protection" policy long pursued by the Bank of Botswana.⁸ Lucara Diamond Corp, the operator of the Karowe Mine, exemplifies how the 2026 downward crawl supports high-margin industrial exports during a period of global price volatility.¹⁰

Lucara’s revenue is entirely dependent on the global diamond market and is denominated in USD.¹⁰ In Q3 2025, the company achieved operating margins of 57 percent, a testament to the high-value nature of the Karowe South Lobe diamonds, which have included historic recoveries such as the 1,094 carat "Seriti" and multiple stones exceeding 1,000 carats.¹⁰ The 2.76 percent downward crawl is a critical defensive tool for Lucara. As the company progresses with its Karowe Underground Project (UGP)—a project with a $190 million project finance facility—it faces significant Pula-denominated costs, particularly in terms of local labor and domestic electricity consumption.¹⁰

A weakening Pula directly reduces these costs when measured against the company’s USD revenue. In its 2025 guidance, Lucara assumed an average exchange rate of 13.0 Pula per USD.¹³ If the 2026 downward crawl allows the Pula to slide further as intended, Lucara will see a "foreign exchange gain" on its Pula-denominated operating expenses, which in Q3 2025 stood at $25.65 per tonne processed.¹⁰ This mechanism provides a vital cushion at a time when natural diamond prices remain "cautious" due to structural shifts and competition from lab-grown diamonds.¹⁰

Parallel to Lucara, Minergy Limited, a coal exporter, demonstrates the policy's impact on regional trade. Minergy’s primary market is South Africa, meaning its revenue is largely earned in South African Rand (ZAR).¹⁵ The Pula basket is heavily weighted toward the Rand (45 percent), and the downward crawl is calculated based on the inflation differential between Botswana and its partners, including South Africa.¹ For Minergy, which reported a 181 percent year-on-year revenue increase to P147.7 million in late 2024, the crawl ensures that its coal remains price-competitive in the inland South African market against local South African producers.¹ Furthermore, the asymmetric margin reduction to 3 percent is highly beneficial for Minergy’s cash flow, as it allows for the efficient conversion of ZAR proceeds into Pula to pay its local mining contractors, whose costs increased significantly in 2024 due to fuel and explosive price hike.

Sources:

• Lucara Diamond Corp: Revenue guidance for 2025, operating margins at the Karowe Mine, and the status of the Underground Project (UGP) are based on the company's Q2 and Q3 2025 financial results and guidance announcements.

• Minergy Limited: Revenue growth figures (including the 181 percent year-on-year increase), coal production metrics, and the impact of South African market dynamics are provided in the company’s interim results and strategic reviews [8, 9].