22 Aug 2016

As Botswana gears towards its 50th anniversary of splendid independence, alongside is the Botswana Stock Exchange (BSE) contributing significantly to the country’s economic growth.

The bourse’s market development manager, Ms Thapelo Moribame, told BOPA in an interview that at inception in 1989, the Botswana Share Market (BSM), as BSE wall was then called, had only five companies listed on the domestic equity board. 

Today, the Botswana Stock Exchange has on its list 34 equity securities (Shares), four Exchange Traded Funds (ETFs), and 39 debenture securities (Bonds).  

Ms Moribame said as at August 11, 2016, the equity market capitalization for both domestic and foreign boards was P424 billion, with the domestic companies standing at P47 billion, Exchange Traded Funds (ETF) market capitalization stood at P873 million, whilst the total nominal value of bonds listed stood at P11 billion.

Although she admitted that this was a significant growth, she however said plans were in place to pursue further growth in order to increase the bourse and meet investor demand.

Ms Moribame said BSE was certainly one of Africa’s best performing stock exchanges, with a compound annual growth rate of 11.5 per cent over the past decade.

According to the African Stock Exchanges Association (ASEA), the BSE has been rated the third largest stock exchange in terms of market capitalization in Southern Africa.

The accolades, said Ms Moribame, were encouraging as they continue to work hard to develop the sector as a whole and increase awareness of the BSE’s role in the capital market to promote the listing of companies to raise capital and promote growth, as well as to be an uptake of stock by investors.

“This requires all structures to function equitably as a whole as the performance of the industry is not only important for current investors, but for future investors as it acts as a barometer of economic health,” she said.

She further explained that technology was at the core of the operations of the BSE and that it served an important purpose of improving efficiencies in line with international best practice.

“The commissioning of the Electronic Trading System (ATS) by the BSE in 2012 has been one of the most important infrastructure investments at the BSE,” said Ms Moribame, adding that the system allowed for real-time matching of the orders for listed securities.

Also, she said the Central Securities Depository (CSD) System, which is a depository clearing and settlement system for all transactions executed at the BSE, was introduced in 2008.

It also facilitates custody/safekeeping of securities, securities borrowing, and lending, as well as collateral management, she explained.

As a stock exchange, Ms Moribame said the BSE competed with stock exchanges in the world as investors looking to trade shares have the option to choose where to put their investment.

Ms Moribame said formally established in 1989, the BSE traces its humble origins to when it was known as Botswana Share Market (BSM) and only traded as an informal market.

At the time, she said there were only five listed entities with a single broking firm, which was also charged with facilitating trading on the exchange via the marching orders.

“In order to encourage foreign investors to Botswana, an interim exchange committee was set up in 1990 with representatives from the public and private sector,” she said.

In 1994, said Ms Moribame, the legislation to transform BSM into a full exchange was passed by parliament paving the way for the establishment of the Botswana Stock Exchange, where trading took place in 1995.

Three years later, in 1998, Ernst & Young took the full administration of the BSE and in 2001 a Chief Executive Officer (CEO) was appointed with the aim of making the BSE independent, she reminisced.

“In 2003, BSE relinquished the secretarial role of Ernst and Young in order to better serve stakeholders and be more responsive to global events and to remain competitive,” she said. Ends