BSE acting CEO Kopano Bolokwe
11 ETFs have been granted Local Asset Status
Sygnia to list 7, Satrix 4
3 more are being reviewed
Exposures include the S&P500, MSCI World, FTSE 100, Eurostoxx 50
The Botswana Stock Exchange (BSE) is preparing to enroll Exchange Traded Funds (ETFs) that track global market indices, diversifying away from its previous focus on commodity-based ETFs.
According to communication by the exchange, eleven ETFs have been granted Local Asset Status (LAS) by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), clearing the path for their enrollment on the exchange.
ETFs are listed investment products that track the performance of an index such as a basket of shares, bonds or single commodities.
BSE said ETFs to be introduced represent various exposures including the S&P500, MSCI World, FTSE 100, Eurostoxx 50, MSCI Japan, and MSCI Emerging Markets, among others. Four ETFs are being introduced by Satrix, while seven are from Sygnia, according to Acting CEO Kopano Bolokwe who said three more ETFs are currently under review.
Satrix is one of South Africa’s leading providers of index-tracking products while Sygnia provides top-performing unit trusts and ETFs.
“The ETF market is destined for significant improvement as well, as some potential ETF issuers have now attained LAS from NBFIRA,” the exchange revealed this week adding that “this milestone is very critical to enable potential issuers to then explore the listings application processes, assisted by their designated advisors”.
With pension fund assets being repatriated to meet the 2027 statutory limit of a 50/50 split between offshore and onshore investments, the LAS will enable pension funds to treat these ETFs as domestic assets, despite their revenue being generated outside the country.
“We speak often with our counterparts in South Africa, they are looking at the situation and assessing the potential and continued opportunities in the market,” Bolokwe said during an ETF webinar recently.
Currently, the BSE has four ETFs listed on the exchange: NewGold, NewPlat, NewPall, and the Africa Domestic Bond Fund (ADBF).
Graphics by BSE
According to the BSE report for September, the NewGold ETF has outperformed its 2023 performance with the price of spot gold reaching record highs on a year to date. This has positively elevated the price of the NewGold ETF on the BSE by 31.1% year-to-date. Similarly, the NewPlat ETF registered a price increase of 5.8%.
BSE indicates that the NewGold ETF has traded 788,738 units, while the NewPlat ETF has traded 524,649 units of which 41% and 82% of these respective trades occurred during the third quarter of 2024. The Africa Domestic Bond Fund (ADBF) ETF has dropped by 6.3% so far in 2024.
Overall, BSE shows that the total value of ETFs traded has increased by 53.3% to P305 million in 2024 from P198.9 million in the corresponding period in 2023. Further, the total value of ETFs traded on a year to date has transcended the total value of ETFs traded during the full 2023 year (P215.6 million).
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