Bond trading activity has soared to P4.7 Billion year-to-date
BSE reports a 165.6% rise in the trading of Government bonds
The government, represented by the Bank of Botswana (BoB), will go to the market on October 25th to raise P3.7 billion. This comes amid a market characterised by underallocation, particularly for longer-dated bonds.
The government is offering a total of P2.2 billion in three treasury bills. This includes P700 million each for the 3-month and 6-month treasury bills, and P800 million for the 12-month treasury bill.
On the longer-dated curve, the government will auction P1.5 billion, including P350 million for the 3-year note, P450 million for the 11-year note, and P700 million for the 19-year note. With the government conducting auctions at the end of each month, the bond market has experienced significant growth.
Botswana Stock Exchange (BSE) market report shows that bond trading more than doubled between January 1 and September 30, led by a 165.6% rise in the trading of Government bonds which constitute 83.7% of bond market capitalisation.
Bonds accounted for 78.3% of BSE trades during the reporting period. Corporate bond trades have approximately quadrupled in comparison to the corresponding period in 2023, BSE said noting that total trades amounted to P4.7 Billion compared to P1.8 Billion in the same period in 2023. This has eclipsed the total bond trades for the entire 2023 which amounted to P3.0 Billion.
At the close of September, the number of listed debt instruments totalled 133 and comprised 7 Government Bonds, 98 Corporate Bonds, 27 Commercial Papers and 1 Sustainable Bond.
BSE said the increased awareness and capacity building around the issuance of Sustainable Bonds, is gradually translating into tangible results. At least 2 big banks are at an advanced stage of coming to market to raise sustainable capital, as the creation rate of eligible assets has rapidly picked pace.
BSE believes this is a commendable development as they will benefit from fee incentives on the BSE through a 25% discount on initial listing fees and annual sustaining fees.
"With some of the recent sustainable finance development initiatives, the BSE has now positioned itself as a one-stop-shop for sustainable finance, with services and products that extensively support ESG Investing, ESG Disclosures, ESG Ratings and a regulatory framework that is anchored on international best practice while sufficiently accommodating local market nuances. “
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