BSE goes electronic

WANETSHA MOSINYI
Staff Writer | Friday February 8, 2008 00:00

Presenting the 2008/09 Budget speech, Finance Minister Baledzi Gaolathe said Government supports the development of capital markets with projects such as the installation of the CSD on the BSE.

The CSD registers share certificates electronically. Market analysts have welcomed the project, saying it will boost liquidity on the local bourse.

CEO of Stockbrokers Botswana Geoffrey Bakwena said government should be commended for assisting the BSE to secure the CSD because the facility will speed up the sale of shares. 'I understand this system (CSD) is very expensive and that government helped the Botswana Stock Exchange secure it,' Bakwena said. 'They should be commended for that.

'The system that is being used now is very tedious. For example, you have to fill in the indemnity form and print out the share certificate. That delays the process.' Bakwena said because the CSD is automated, it will help their clients trade shares more efficiently. The system should be particularly good news to dual-listed companies who are already using similar systems at other bourses. 'Once the CSD is installed, they (the dual-listed companies), don't have to produce share certificates, meaning they won't incur more costs in printing and then posting them to Botswana,' said Bakwena.

Speaking to BusinessWeek last year, BSE's Listing and Trading Manager Bopelokgale Soko agreed with Bakwena that once implemented, the CSD will definitely increase liquidity and encourage more people to trade. BSE has also introduced three new indices, which will reflect on the total returns of constituent securities more effectively. The Local Asset Status Index (LASI), the Foreign Resources Sector Index (FRSI) and Domestic Financial Sector Index (DFSI) have replaced the Domestic Companies Index (DCI) and Foreign Companies Index (FCI). Gaolathe also announced that government will soon introduce a regular bond issuance programme. He said the regular bond issuance will include the introduction of six month treasury bills and a regular programme of issue and re-issue of bonds to build up and maintain a presence across the yield curve from six months to 12 years. 

A mix of maturities will replace the 5-year bond that will mature in March 2008 across the yield curve. Bakwena said the bonds will be issued based on demand; it will therefore allow the capital market sector to play a role in what the rate is. 'The yield curve will not only be what the government wants, but also what the market says,' Bakwena said.     Other efforts to support the development of capital markets include the drafting of the Securities Bills which will be tabled in Parliament in July. Government will also draft a Financial Intelligence Bill to rein in money laundering and the financing of terrorism.

In order to strengthen the oversight of the accounting and auditing professions and improve the reporting of financial matters of the corporate sector, a Financial Reporting Bill will also be tabled in Parliament in the Winter session.