BSE sees traded value doubling to P6bn
Mbongeni Mguni | Wednesday March 16, 2016 18:00
The bourse currently has 32 listed companies, of which 22 are on the Domestic Companies Index (DCI). By the end of last year, the DCI counters had a market capitalisation of P50.2 billion or 34 percent of the country’s Gross Domestic Product.
BSE CEO, Thapelo Tsheole told last week’s inaugural listings conference that the bourse was aiming for greater growth in the next few years.
“We would like to grow the value of shares traded to about P6 billion in the next four to five years,” Tsheole said.
“In 2003, we had about P1.6 million as the value of shares traded every day and now, with the help of the Automated Trading System, we are at P12.2 million per day.
“By local standards, I believe this is a large amount of money and our plan is to bring more companies to the exchange and increase the number of participants, diversity and local market activity.” Part of the BSE’s plans to sustain growth include tapping into the unlisted Small to Medium Enterprises (SME) sector, many of which are family owned entities, which are traditionally reluctant to open up to the new shareholders that listings bring.
The SMEs and other established unlisted companies attended the conference in large numbers, where Tsheole and other financial sector experts shared the benefits of listing. The conference also featured testimonies from established local listed firms, such as Choppies, Sefalana, Turnstar and Letshego, who shared their paths to listing and the benefits they had accrued.
Tsheole explained that the main benefits of listing include access to capital, attracting funding, improving liquidity, employee retention through issuance of shares, increased public profile and greater governance reputation. In addition, listing provides a form of valuation for companies. “Going forward, we will be knocking on a lot of doors,” said the CEO.
“We will be saying to those family owned businesses ‘come forward, list and contribute to the growth of the economy’.”
Interest in the BSE as an engine of wealth creation has been growing over the years, with about P515 million in shares offered via Initial Public Offers in 2010, 2012 and 2015, as well as about P1.3 billion over the same years in rights and additional issues.
The Botswana Telecommunications Corporation Limited IPO, which closed recently, is set to add hundreds of millions more in new shares and at least 40,000 new shareholders.
“We want to internationalise the exchange, looking at the competitive advantages this country has,” Tsheole said.
“These advantages include the absence of exchange controls, stable political environment, highest credit rating in Africa and others.
“Of the 22 local companies listed on the BSE, 12 have a regional presence and this is important not only for the exchange, but for the economy.”
“We are saying raise your capital here and use the BSE as a springboard into the regional market.” The BSE’s listings and trading manager, Tsametse Mmolai told the conference that if a qualifying company had sound advisers, it could receive an approval for listing within 30 days of first submitting an application.
He explained that the BSE offers listings on the main board, Venture Capital Board, Exchange Traded Fund board, Corporate Bond board and the Serala Over the Counter board.
“Come and see us. We are open for business. Appoint a sponsoring broker and let’s talk,” he said.