New hi-tech platform doubles BSE trade

MBONGENI MGUNI
Staff Writer | Thursday November 1, 2012 00:00

 

At the ATS launch yesterday, Hiran Mendis said that daily turnover is now averaging P4.02 million up from P2.67 million prior to the advent of the new system. In addition, 1,248 deals have been sealed in the two months after the August 24, compared to 471 in the month leading to the introduction of ATS. 'These are early days yet, but it appears the ATS is starting to take effect,' Mendis told journalists yesterday.

'For it to take full effect, the brokers and other market participants must come to grips with the system and understand how to use its functionalities. Trading is still about relationships between participants. The ATS enhances liquidity by facilitating these relationships,' he explained.

The multi-million-pula ATS has done away with the manual system of trade and ushered the local bourse into the hi-tech era of cyberspace securities trading. Boosting liquidity, or the rate at which securities change hands, has been a perennial challenge for the BSE, with large institutional investors holding onto to their massive portfolios and listed companies keeping to the statutory minimum for free floats. The ATS introduction comes four years after the establishment of a Central Securities Depository (CSD), which advanced the settlement and clearing of trade in securities.

Finance and Development Planning Minister, Kenneth Matambo said the enabling policy and legislative environment provided by government for capital markets has enhanced liquidity. 'These developments (CSD and ATS) will contribute to an increase in liquidity and service to attract additional domestic and foreign investors as the settlement, clearing and trading standards used will be internationally recognised,' he said at the launch.

'Government will continue to focus its efforts on developing and enhancing the institutional framework and regulatory oversight of the financial markets and system in Botswana to maintain the stability of the financial system,' he added.

Officially launching the ATS, Vice President, Ponatshego Kedikilwe said the system would be at the heart of an upgraded financial services sector, which is positioning Botswana as an investment hub in the region. 'Botswana is ideally positioned as a hub for a broad range of financial services including banking and investment in capital markets,' he said.

'The ATS is an investment that will enable us to showcase Botswana nationally, regionally and internationally.'

Kedikilwe added that the speeding up of the privatisation process would assist in the development of the local capital market through the listing of privatised assets via Initial Public Offers (IPO). With the launch of the ATS, the local bourse joins seven other African countries using the state-of-the-art technology to deepen capital markets. Currently only South Africa, Ghana, Nigeria, Egypt, Kenya, Zambia and Mauritius have upgraded from floor trading to the electronic trading of shares.

The BSE is the second bourse in Africa to acquire the current version of the ATS installed by Millennium Information Technologies after the Johannesburg Stock Exchange (JSE).