20 Sep 2020

 The capital stock market has experienced a 5.8 per cent decline due to the COVID 19 pandemic.

Giving an update on the performance of the stock market, Botswana Stock Exchange (BSE) chief executive officer, Mr Thapelo Tsheole, said the domestic company total return index declined by 2.4 per cent in comparison to the price index, while the foreign company index declined by 0.8 per cent.

 Mr Tsheole said the total equity turnover from January to date had a share value of P483 million worth of shares, which was lower than the P1.2 billion experienced in the same period last year.

He said the value of shares traded in the market since January was about P3 million daily, compared to P7.1 million in 2019, which translates to a 60 percent decline, which he attributed to the impact of COVID-19.

Meanwhile, Mr Tsheole indicated  that the bond market seems to trade more in times of crisis, highlighting that P1.6 million corporate bonds traded, while P835 million worth of  government bonds traded.

 He highlighted that the total bond market generally outweighed the equity markets.

The majority of the trades in the stock market, he said, were done by local fund managers at the value of P277.1 million, which translated to 57 per cent of the total turnover, adding that individual share market contribution stood at P32 million that translated to 6.6 per cent of the total cumulative turnover.

He indicated that the stock market had in recent times, experienced normal course of business, as some investors are selling and some are buying as the share prices keep on fluctuating daily.   

Mr Tsheole noted that both investors and listed traders are responding to the current market activities differently, with some disposing off their shares, while the current state of affairs could prove to be conducive for buyers, depending on the investor’s strategy and mandate.

The foreign index participation in the local market, he said stands at P150 million, which translates to 31 percent contribution to turnover. He said much of the activity in the market was currently as a results of companies buying shares to raise capital in order to protect their market value and capital outlay through either issuing shares or additional bonds and shares.

 Mr Tsheole said BSE is currently on a drive to advise local companies to invest in the stock market, particularly during the economic meltdown.

He said companies struggling to meet deadlines on submitting their annual financial results, will not be delisted, but rather be given time to cushion them during the pandemic outbreak.

 Mr Tsheole applauded  the government’s recent move to approve the increase in government bond issuing from P15 million to P30 million, stating that the approval will enhance BSE’s international stature.

 He however decried the complex nature of public accessibility to government bonds, saying such bonds are not easily accessible to the public. The BSE, he said, was currently engaging with Bank of Botswana on removing bottlenecks that impede easy trading of government bonds in the stock market. ENDS