In just three months, the Botswana Stock Exchange’s years-long efforts to attract new listings and establish itself as a contender for capital-raising in Africa, received an unprecedented boost with the opening of four Initial Public Offers.That these came after a nine-year drought where the last IPO was in November 2017, made the feat and the efforts of those involved even more remarkable.In the third quarter of the year, Continental Re and Kwa Nokeng opened IPOs seeking - and in the case of the latter - successfully securing billions of Pula from a capital market that has been eagerly seeking investible opportunities.The numbersIn January, the BSE’s total market capitalisation across all instruments and platforms was P752.4 billion, a figure that by Wednesday had risen to P1.09 trillion. The growth of nearly P340 billion has propelled the BSE into the top five of Africa’s largest stock bourses by market capitalisation, an elite group with titans such as South Africa, Nigeria, Morocco and Egypt.The numbers underline the rarefied air the BSE has been operating in this year, a metric-breaking run across products and values that has seen it cross the trillion-pula mark and launch into the ranks of Africa’s biggest exchanges.In the nine months to September 30, the BSE enjoyed a rosy period across the various instruments its offers on its platforms. In equities, turnover or the value of shares traded, reached P2.1 billion, making 2026 the third strongest year-to-date trading period over the past five years.In terms of share prices, the Domestic Companies Index (DCI) grew by two percent over the period, compared to 5.5 percent over the corresponding period last year, while the Foreign Companies Index rose by 45.7% compared to 0.4 percent.Whilst the DCI slowed over the period, the Domestic Companies Total Return Index, which tracks both share price movements and dividend payments, rose by 5.2 percent outperforming the price-based DCI and highlighting the significant contribution of dividend distributions to overall shareholder returns.Other products sparkled as well over the same period, with total bond market capitalisation reaching a record P46.7 billion, representing growth of 18.5% from P39.4 billion in the prior corresponding period. Bond market turnover increased by 87.6%, rising from P2.26 billion to P4.25 billion and ticking off a box the BSE has long pursued which is greater fixed income market activity.The Exchange Trade Funds (ETF) sector was equally bright in the nine months to September, with turnover increasing by 263.1% from P446.3 million to P1.62 billion, while units traded rose from 1.6 million to 5.2 million.The BSE successfully listed three additional ETFs over the period, contributing to a 107.3% increase in ETF market capitalisation from P37.7 billion to P78.1 billion and underlining why Exchange officials say the ETF market is one of the fastest-growing segments of the local bourse.Big fishThe dizzying success the BSE enjoyed this year was crowned recently when the Exchange scooped the much sought-after and coveted status as the host of the Dangote Refinery IPO targetted at Southern Africa.Beating out titans such as the Johannesburg Stock Exchange, which had previously been rumoured to be in line for a secondary listing of the IPO, the BSE was selected as the hub of the IPO’s Southern African offer. This essentially means the BSE is hosting the platform that will provide 14 countries in the region, including South Africa, with access to the $1.6 billion IPO, Africa’s biggest offer, powered by Africa’s richest man, Aliko Dangote.Anchored through Access Bank Botswana, the float involved $500 million on offer for local and regional investors. The offer closed recently and early indications point to an oversubscription, with reports that brokers worked through the night receiving applications and processing them.BSE chairperson, Neo Mooki, was one of the key actors involved in drawing Dangote to Botswana, a financial markets coup that has bolstered the country’s hopes of becoming the continental “capital of capital”.Mooki headlined a visit by Vice President and Finance Minister, Ndaba Gaolathe, in April to tour the Dangote refinery outside Lagos, one of the largest in the world. The capital markets dynamo shuttled between Nigeria and Botswana drumming up support for a BSE-listing, highlighting the bourse’s infrastructural and technological prowess, regional connectedness and the country’s investment climate that provides the bedrock and stability for capital raising.Mooki spoke of the African vision for capital recently at the unveiling of the Dangote deal.“We have the resources, the talent, the ambition, the savings and the entrepreneurs capable of building world class businesses,” she said. “What we have too often lacked are the financial pipes connecting African savings to African opportunities and those pipes are precisely what our capital markets must build.”She continued: “Capital that cannot reach our people cannot fulfil Africa's promise and if Africa's industrialists are building industries, our responsibility is to build the pipes that connect our markets to one another. “These pipes will give ordinary Africans an opportunity to participate in the wealth being created across our continent.”Apart from the Dangote Refinery opportunity, which is being offered via depository receipts and the Continental Re and Kwa Nokeng IPOs, the BSE on Monday unveiled the historic Stanbic Bank Botswana IPO.Stanbic Africa Holdings Limited, a unit of Standard Bank Group, is seeking to sell a 20% stake in its wholly owned subsidiary, Stanbic Bank Botswana, at P4.30 per share. The offer, which comes 32 years after Stanbic first opened doors in Botswana, follows years of lobbying by local economic commentators and analysts who had noted that Stanbic was the only one of the Big Four banks to not have a public equity listing.The four issuers of IPOs thus far this year will be buoyed by the results of the first float to close. Kwa Nokeng announced recently that its IPO was oversubscribed by 21 percent and a listing is due for November 10, adding to the BSE’s market capitalisation.The anchorAnalysts say driving the surge in IPOs and general activity on the BSE thus far this year has been the pension fund sector, which as at August was sitting on P179 billion in assets.The country’s pension funds are racing to meet a regulatory requirement to hold at least 47% of their assets domestically by December and the industry spent most of the year hovering around 45%.Under changes to the Retirement Funds Act, local pension funds are required to invest a minimum of 50% domestically by December 2027, as part of mobilising capital for local development.The phased approach began in 2023 at 38% and reached 44% last December. Latest figures from the Bank of Botswana indicate that pension funds spent the year moving between 46.6% assets invested locally at best and 44.6% at worst, in regards to the target of 47% by December. As at August, the date of the last available data, pension funds held 45% of their assets at home, indicating the work required by year-end.Absolute numbers from Bank of Botswana data suggest that as at August, the pension funds had about P4 billion held overseas which they needed to move home to meet the 47% target, within the four months remaining to December 30, 2026.NBFIRA’s regulations and the narrowing of timelines ahead of the 50% target are believed to be partly behind the recent surge in IPOs, as asset managers scramble to redirect their portfolios into local asset classes.However, the quality of the IPOs, ranging from Africa’s largest with Dangote, to the most eagerly anticipated with Stanbic, suggests that the pension funds finally have a taste of the investible assets they complained were scarce when regulators introduced the phased requirement to 50% domestic holdings.For the BSE, which now sits at the Big Table on the continent’s capital marketplace, greater things are planned.Next year, the Exchange plans to tap into tokenisation, which is a way of representing traditional investments digitally, potentially making them easier to buy, sell and transfer.The BSE also has plans to introduce an integrated retail distribution ecosystem that will allow investors to transact through familiar digital channels, making participation in capital markets more convenient.BSE insiders say despite the record year already experienced thus far, more is in store potentially in terms of new listings before year end and into 2027.A stellar year for the bourse looks set to continue into the future.
