Sygnia also made significant progress
Around 11 new exchange-traded funds expected
Satrix, one of South Africa’s leading providers of index-tracking products, is poised to list four exchange-traded funds (ETFs) on the Botswana Stock Exchange (BSE), Kopano Bolokwe, the Head of Product Development at the bourse announced.
Bolokwe disclosed this during the BSE’s Educational Webinar on Exchange Traded Products held on Tuesday. The aim of the webinar was to raise awareness of the nature of these products.
ETFs are listed investment products that track the performance of an index such as a basket of shares, bonds or single commodities. The FTSE/JSE Top 40 and the S&P 500 are both examples of an index. Retail and corporate investors benefit from the performance of the underlying asset/index/commodity even though it may not be listed on the BSE.
ETFs have to attain Local Asset Status (LAS) for them to be listed on the BSE. The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) is the custodian of the LAS policy through the PFR2 and, therefore, authorises requests by foreign entities that wish to access the pension fund assets reserved for local investment, subject to satisfying the set criteria.
Bolokwe noted that considerable effort was dedicated last year to securing Local Asset Status for Satrix’s four ETFs.
“It’s now working with its advisors to list these four exchange-traded funds,” Bolokwe said adding that these are instruments that “we have never seen before on the exchange “if you look at the MSCI World Equity, MSCI Emerging Markets, Global Aggregate Bond and Infrastructure Feeder ETFs”.
Bolokwe observed that many investors have shown keen interest in international markets, particularly focusing on the US. They aim to gain exposure to renowned companies such as Apple, Amazon, and Google.
“Some of these ETS will be able to achieve that particular objective,” Bolokwe said.
Sygnia also made significant progress by submitting an application to NBFIRA for local asset status for seven exchange-traded funds. Sygnia provides top-performing unit trusts and ETFs.
“So if all goes well this year, we should have around 11 new exchange-traded funds,” Bolokwe said, adding that there is also interest from Sygnia to list even more.
Currently, the BSE has four ETFs listed on the exchange: NewGold, NewPlat, NewPall, and the Africa Domestic Bond Fund (ADBF). From January 1 to February 29, ETF turnover amounted to approximately P11.5 Million recorded from 87,767 units traded, according to BSE Market Report. This was in comparison to P369,000 recorded from 1,936 units in 2023. The NewPlat ETF and NewGold ETF gained 1.4% and 6.0% respectively while ADBF ETF lost 5.2% so far in 2024.
The exchange had its highest number of listed ETFs at seven, with three subsequently being delisted. Absa was the first to list its ETF, the NewGold, in 2010 at a price of about P83. It has since appreciated significantly, now trading well above P250.
“We’ve been on this journey for quite some time,” Bolokwe said, acknowledging the challenges. He emphasised that the BSE has persevered with the help of a strategy aimed at expanding and diversifying investment offerings. This strategy also focuses on providing various risk-return options, improving liquidity as the market grows in size, and making significant contributions to the development of the economy.
He believes ETFs don’t just represent investment instruments but also enhance service delivery within the ecosystem for those involved, including legal advisors, brokers, and others.
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