BSE positions itself as regional securities hub
Pauline Dikuelo | Friday November 20, 2015 15:04
BSE deputy chief executive officer, Thapelo Tsheole said this will be done by ensuring a robust stock exchange with quality equity, bond and alternative investment listings.
“We want to ensure a deep and liquid trading environment and world class regulatory and supervision environment,” he said.
He noted the BSE has embarked on a strategy that has culminated in the pursuit of several initiatives, with the most recent being the introduction of market-making for all the listed securities.
“Market-making will ensure that there is always a trading counterparty on either the buy or sell side thus improving liquidity on the exchange,” said Tsheole.
He said the draft market-making rules were completed in January 2015, and await the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) approval.
“To this end, the BSE plans to leverage on its expertise in introducing exchange traded funds (ETFs) to introduce similar products whose underlying assets are either onshore or offshore,” he said.
Tsheole also said the initiative is sound given that there is excess liquidity in domestic capital markets relative to existing investment opportunities. In positioning itself as a regional finance and investment hub, he said, the BSE plans to pursue more strategic partnerships with established financial instruments providers from outside and within Botswana.
“To attest to our intent on being a regional finance and investment hub, in Africa the BSE is the first exchange outside of South Africa to list ETFs. Further, the BSE has also been part of a lot of benchmarking exercises that enabled other African exchanges to ultimately list ETFs,” said Tsheole.
He further stated that BSE remains a robust capital sourcing and trading platform that supports innovative solutions. Meanwhile, Tsheole said BSE seeks to attract the listings of Commercial Papers. These are unsecured and short-term debt instrument that allow corporates to meet their current liability needs.
He said they are currently about to complete the draft Debt Listing Rules, which include rules on Commercial Papers.
Other notable BSE initiatives are the Serala OTC Board and of course listing of ETFs.
The stock exchange also intends to implement securities lending and borrowing.
This is a concept that involves the act of loaning a stock, derivative, other security to an investor or firm. This concept is still at an initial stage.
Since the listing of the first ETF (NewGold) on the BSE in 2010, the BSE has since listed two other ETFs, namely BettaBeta and NewPlat ETFs. The listing of the Barclays Africa Inflation-Linked Bond Index ETF this week marked the fourth ETF on the BSE.
As at last week Thursday, a cumulative 30.7 million ETF units had been traded on the BSE, yielding a cumulative turnover of P1.2 billion. Tsheole said this is evidence that ETFs have indeed improved the BSE’s product offering and liquidity.