Neo Mooki, BSE chair and Kopano Bolokwe, Act. CEO of the BSE
Reports P412 million in total market turnover on Tuesday
Institutional portfolio rebalancing at play
All 32 stocks have transacted this year
The Botswana Stock Exchange (BSE) traded P412 million in total market turnover on Tuesday 22nd October 2024, which is the highest single-day turnover on the BSE so far this year.
According to a statement by the exchange, this comprises trades across almost all the counters on the Main and Ventures Boards, as well as Exchange Traded Funds (ETFs), and constitutes sixty transactions in total.
BSE explained that the trades were mainly on account of institutional portfolio rebalancing and ordinary market transactions.
“We are experiencing a trend where firstly all the stocks and instruments are being transacted, and then secondly the number of transactions continue to rise,” BSE Acting CEO Kopano Bolokwe said.
“This is very crucial when it comes to growing the liquidity of instruments on the BSE because this then results in the ability of investors to move more easily in and out of instruments, lower price volatility, improved price discovery, and more reflective price information.”
Prior to Tuesday, the largest single-day trades recorded this year, which were trades of over P100 million in a day, were P119 million on 20 March 2024 and P112 million on 30 January 2024.
When liquidity increases, Bolokwe says the BSE becomes attractive to potential issuers and investors and this translates into a greater ability to attract even more international issuers and investors. Before Tuesday, the largest single-day trades recorded this year, which were trades of over P100 million in a day, were P119 million on 20 March 2024 and P112 million on 30 January 2024.
When liquidity increases, Bolokwe says the BSE becomes attractive to potential issuers and investors and this translates into a greater ability to attract even more international issuers and investors.
“In the process, our economy as a whole would benefit with companies being increasingly able to access capital from a diverse pool of investors at a reasonable cost, subsequently increasing investment in their businesses and driving increased employment and their overall contribution to the economy.”
Liquidity Surges In 9 Months
From 1 January to 30th September, BSE's total equity turnover amounted to P1.0 billion which translates to an Average Daily Turnover of P5.5 million during the period under review.
Graphics by the BSE
The current year-to-date performance surpasses the historic 4-year trend save for 2023, where the BSE recorded the highest amount of turnover in history worth P3.8 billion. This record-breaking milestone was attributable to the Botswana Insurance Holding Limited transaction that amounted to P2.9 billion on 4 September 2023, constituting the highest ever single counter, single trade in the history of the Exchange.
BSE said it has always anticipated that it would be challenging to surpass a trade of this magnitude in the short term on account of a single stock. It is for this reason that the year-to-date equity turnover is overshadowed on a comparative basis.
However, stripping out such an anomalous trade, BSE indicates that the year-to-date equity turnover has gone up by 11.1% relative to what it would have been absent last year’s historic trade. The total market capitalisation has risen by 19.4% in 2024 relative to the corresponding period in 2023.
The top three traded companies during the period between January and September were Sechaba (P193.0 million), Access (P139.8 million) and CA Sales (P102.6 million). The total turnover from these three companies accounted for 42.8% of total equity turnover, with the leading counter Sechaba accounting for 19.0% of total equity turnover.
In comparison to the same period in 2023, the top 3 traded companies accounted for 85.1% of total equity turnover with the leading counter BIHL accounting for 77.2% (P2.9 billion) of total equity turnover. All 32 stocks on the BSE have traded so far this year.
Four Companies To Consider Listing
While the exchange hasn’t registered any equity listing so far in the year, it said tangible attempts and progress are being made. Accordingly, the BSE said at least four companies that it has been consistently
interacting with to advance its listings value proposition have indicated that their governing bodies have passed board resolutions to raise equity capital by way of listing on the BSE. “On this note, a few are still undergoing restructuring, consolidations and establishment of holding companies that would become listed entities,” the exchange said adding that the indicative timeframes range from the remaining part of 2024 all the way to early 2026, and the methods being considered are an Initial Public Offering (IPO).
IPO is a method that improves the market immensely as it brings new investors, vibrancy, attracts new capital and naturally reinforces the value, to both investors and issuers, of taking part in public markets.
Related to this, the 2024 cohort of the Tshipidi Mentorship Programme has graduated and the Programme has inspired and capacitated companies that are registered at the other boards on the BSE, such as the Serala Over-The-Counter Board, to commence the requisite preparations for graduation to the Main Board. BBS Bank is said to be in the process of listing on the main board.
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