BSE to list on BSE

Oarabile Molelekwa | Friday August 10, 2018 12:41

The BSE, with effect from August 2, transformed from a statutory body collectively owned by government and stockbrokers to a company. The move created an entity known as BSE Limited, meaning the BSE no longer operates under the BSE Act of 1995 but operates under the Companies Act.

Demutualisation is a process of transforming from a member owned, not-for-profit, entity to a for-profit, investor-owned corporation which involves changing the legal status, structure and governance of an entity.

Under its new structure, BSE Limited is 81.3% owned by government, with other shareholders being its stockbrokers; Stockbrokers Botswana (5.75%), Imara Capital (5.75%), Motswedi Securities (4.32%) and African Alliance (2.88%). Still pending is a five percent allotment to employees, which BSE has requested government to make available. While the self listing is planned, the final decision will lie with the shareholders, BSE CEO, Thapelo Tsheole told journalists on Wednesday.

“We have to engage the shareholders. If they agree we will revalue and see how much the BSE is worth, then go ahead and list,” he said, adding that the engagement would begin next month. At its demutualisation, the BSE’s value was pegged at P35.6 million. Tsheole said self listing is an international practice that stock exchanges adopt in developed markets, highlighting that it attracts capital as some investors normally prefers to invest in demutualisation stocks because they are perceived to be independent.

The demutualisation process took four years and has resulted in a board manned by seven elected independent members and two non-independent members. In the past, the board comprised six brokers and three government appointees. BSE is currently in the second year of its five-year strategy, with goals which include boosting the bourse’s market capitalisation from 34% of GDP to 40% by 2021. The plan also envisages increasing the number of domestic listed companies from 24 to 30 by 2021.