09 Feb 2014

The local bourse outperformed its regional peers, registering growth of 20.5 per cent, the Botswana Stock Exchange (BSE) CEO has said.

Presenting the 2013 results, Mr Hiran Mendis said yearly indicators of liquidity showed that the average daily turnover had tripled from 3.1 million in 2009 to 9.1 million in 2013. The market capitalisation for both the domestic and foreign companies amounted to P413.7 billion in 2013.

Mr Mendis said liquidity in the BSE was comparatively low and there was need to maintain a balance of the average turnover for stability and consistency. He also said the total turnover had improved and this reflected the strength of the market.

Furthermore he noted that the local company turnover was high in comparison to the foreign company turnover which was impressive. Mr Mendis said the BSE had and continued to introduce new services and products while also working at improving their current facilities.

He said they introduced an automated trading system (ATS) in 2012, which was a computer trading programme that automatically submitted trades to the stock exchange. Currently, only brokers could use the ATS but, in future people would have access to it.

“In 2013, the Bond index was launched and it helps in measuring the value of a section of the bond market. With the Bond index, investors and financial managers can describe the market and compare the return on specific investments”, he said.

The BSE has also been in talks with Bank New York Mellon to offer them depository receipts for New York Stock Exchange listed company shares. The Depository Receipts would facilitate cross-border trading and may help non-U.S. companies raise capital in global equity offerings or be used as acquisition currency for mergers and acquisitions.

Depository Receipts allow non-U.S. companies to make their shares available outside their home markets and allow investors in the U.S. and elsewhere to easily invest in companies on a more global basis. This in turn would allow Batswana to also invest in foreign equity.

According to Mr Mendis, the BSE is working on increasing the Exchange Traded Funds by including Platinum ETF listed by Absa Capital among them Newgold ETF and BettaBeta ETF.

Mr Mendis said they took the initiative to make a new set of listing rules which will be complete within a couple of weeks. The listing rules will have to be approved by the board of BSE, Non-Bank Financial Institutions Regulatory Authority (NBFIRA) with the input of financial experts and other stakeholders through consultation.

The rules are said to be precise and concise for easy understanding and the roll out plan for these listing rules will be done in a form of workshops which will run throughout the year to highlight and help the listed companies and brokers to understand them in depth. 

BSE is also in support of the Ministry of Education and Skills Development initiative of “adopt a school”. They believe that, that will be their way of contributing towards building future leaders.  The BSE used funds amounting to P250 000 at Xakao Primary School in Shakawe and Boitumelo Primary School in Sebele to set up libraries. ENDS