RMB sheds light on benefits of listing on BSE
Correspondent | Friday August 26, 2016 14:56
On the back of continued consultations with Botswana-based institutions and companies, RMB Botswana presented before company heads on the listing process at a BSE Listings Conference Follow-Up Seminar recently. The Bank says it was pleased to see more local companies taking a heightened interest in considering listing as a means to assist their business expansion strategies.
“The decision to list is a significant decision in any company’s evolution and can have several benefits including to raise primary capital to support business growth and development. Listing also raises a company’s profile, creates sustainability through corporate structure and governance, creates currency to pursue potentially value accretive Mergers and Acquisitions (M&A), and facilitates the implementation of management incentives schemes to align interests of shareholders and managers,” said RMB Head: Global Equity Capital Markets, Irshaad Paruk.
The BSE is the third largest stock exchange in Southern Africa in terms of market capitalisation and is a tried and tested platform that had assisted local companies such as Choppies Enterprises and Letshego Holdings Limited to achieve phenomenal growth by supporting their expansion strategies across Africa. These Botswana-born businesses are now major influencers at the helm of the development of African people and economies. Their growth has undeniably brought with it substantial employment in the communities they operate in, alongside the provision of their respective solutions.
In the process of listing on the BSE, companies usually go through several steps, including the following:
-Assessing the rationale for a BSE listing
Primary objectives behind a company seeking to list on the stock exchange include gaining access to capital to support growth, or restructure the company balance sheet; or to serve as a liquidity event for existing shareholders.
-Satisfying the key requirements
for a successful offering and listing
Key factors to consider include a company’s readiness; the process of preparation including the development of a compelling investment case; deciding on an appropriate offer structure; and establishing an appropriate marketing and distribution plan. Behind a successful offering and listing, goals to be achieved would normally include achieving an oversubscribed offering; an attractive valuation; a high-quality shareholder base; aftermarket liquidity; and full regulatory compliance. Botswana provides a conducive environment for businesses and has a stable growth trend, making the BSE an attractive listing option. According to the RMB Global Markets 2015/16 research report “Where to invest in Africa”, Botswana is the second best country in Africa in which to conduct business following Mauritius, having surpassed Rwanda, Ghana and South Africa.
“Listing is by no means only a matter of expanding a company’s shareholder spread. The results of listing, both financially and operationally, can be used to drive considerable change in communities and wider economies. Since the BSE continues to contribute a significant proportion to Botswana’s Gross Domestic Product (GDP), its growth, especially from the increased listings of local companies and demand pushed by local participation, stands to in turn benefit Botswana’s economy and communities,” Paruk added.