Foreign institutional investors bought and sold shares worth P511.7 million in Botswana Stock Exchange-listed equities between January and September 30, 2019, a marked increase in their appetite from the corresponding period last year.
According to a Botswana Stock Exchange Limited (BSEL) report made available on Tuesday, foreign institutional investors’ contribution to total equity turnover between January and September 2019 was pegged at 42.2%, up from 35.5% the previous year.
The local bourse recorded total equity turnover of P1.2 billion in the year to September 30, 2019, a drop from P1.23 billion in the corresponding period last year.
Analysts, however, said the improved contribution pointed to the BSEL’s increasing ability to attract trades from beyond the country’s borders, a necessary ingredient in expanding the local exchange.
“A higher contribution to overall turnover by foreign institutions could be related to other factors such as where you have more of those investors shedding their portfolios in Botswana.
“However, overall turnover is marginally lower than that of last year and also equities performed better this year, than last year.
“This suggests that the higher contribution is not related to some sell off, but perhaps higher uptake of shares or stronger prices,” a local equities analyst told BusinessWeek.
Other figures from the local bourse show that for the year to September 30, local institutional investors contributed 52.3% or P628 million of the equity turnover recorded.
The percentage is marginally down from 57.1% over the same period last year. BSEL head of market development,
“The increase in foreign investors demonstrates the level of confidence in our market,” she told BusinessWeek. “Foreign investors are particularly interested in good governance and make informed choices on where they deploy their capital.
“The BSE has been working hard to attract foreign participation with deliberate initiatives aimed towards enticing foreign investors to deploy their assets to our market, given the efficiency of the stock market and Botswana’s competitive and comparative advantage.”
Local retail investors contributed 4.2 percent or P50 million to the turnover recorded in the year to September, down from 4.4 percent last year, while foreign retail investors contributed one percent down from 1.6 percent.
The BSEL report also shows that in the year up to September 30, local equities shed five percent in value led by losses in Standard Chartered Bank Botswana and Letshego Holdings, which declined by 56.1% and 47.5% respectively.
On the flip side, Letlole la Rona and First National Bank Botswana were the biggest gainers in the same period, rising by 21% and 12.7% respectively.
Local equities have since clawed back on the losses, however, reducing their year-to-date losses to -4.14% by close of trade on Tuesday.