Tsheole highlights competitive listing fee structure in comparison to the bonds
The Botswana Stock Exchange (BSE) has seen a rise in Commercial Paper listings, owing to changes in the debt listing requirements. A commercial paper is a form of unsecured and usually short-term debt issued by companies.
As at August 2023, BSE had listed 20 commercial papers from just one in the past year, according to the exchange’s market report. BSE CEO Thapelo Tsheole told this year’s bond market conference that the increase was driven by Letshego Holdings, RDC Properties and Botswana Savings Bank (BSB). Effective November 1, Letshego listed another Commercial Paper to the tune of P60 million.
“This is one of the debt markets that we really want to improve as BSE,” Tsheole told a bond market conference.
“We have made conditions of issuances very conducive, that’s what we are supposed to do as the exchange. We don’t issue, we create a platform and create an environment for entities to issue.”
The BSE developed fee incentives for the issuance of commercial papers including those of sustainable bonds which boosted Botswana’s ranking in the Absa Financial Markets Index. Botswana moved one point up in the African Financial Markets Index because of what the BSE did.
“We are the only institution in the country that has made Botswana to move up,” Tsheole said. “Fee incentives for commercial papers, initial listing fees, annual sustaining fees and documentation are down. We run a very transparent fee structure.”
Selling the Value Proposition of Commercial Paper, Tsheole explained to investors that there is regulatory oversight of the disclosure documents and registered advisers. He pointed to the secondary market enabling price discovery, daily portfolio pricing and entry and exit options. The CEO emphasised on safety in terms of custody in the CSD reducing the risk of loss of assets and increased ease of transfer of assets. There is also visibility to both creditors and investors, good for future lending opportunities and a diverse investor base.
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