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BSE delivers a successful ASEA Conference


Botswana Stock Exchange (BSE) recently delivered one of the most prolific and high profile conferences this country has ever hosted, proving beyond reasonable doubt Botswana’s ability to host major events. 

Headlined by President Dr Mokgweetsi Masisi, the 23rd African Securities Exchange Association (ASEA) Conference brought together leading minds, cutting edge entrepreneurs, Heads of African elites stock markets, policy makers, investors, wealth and asset managers  , captains of industries across the financial services , banking and investment sectors , to discuss issues affecting African capital markets.

Hosted at the magnificent tourist town of Kasane, the conference was held under the theme “Building Resilient African Capital Markets”. Leading finance and investment markets experts deliberated on both challenges and opportunities in the horizon for African capital markets as key players in African’s transformation agenda. When officially opening the two day event on Monday, President Masisi said the event theme “Building Resilient African Capital Markets”, was relevant and appropriate, because the importance of capital markets to the African and the global economic landscape cannot be over emphasized.  

President Masisi underscored that African markets do not yet perform the key functions of providing an alternative to bank funds for debt and equity finance to the private sector which would offer a meaningful secondary market in ownership of securities.  “I therefore challenge you as industry players, to note the serious shortcomings and apply yourselves to turn this around,” he said.

The President further highlighted that it is important to assess capitalisation and liquidity ratios in equity markets noting that where these remain low in the face of significant advances in macroeconomic stability, the key reasons stated are; lack of consistent development of effective regulation and institutions, inadequate financial disclosure as well as insufficient transparency in trading.

“We must discuss the main problems and policy challenges in advancing securities market development. Secondly, we should shed more light on the possibilities and options available to promote the development of efficient and transparent markets through the identification of different policy approaches chosen by individual countries on the continent and in our peer markets globally,” he said.

Mr Karim Hajji President of African Securities Exchanges Association explained that ASEA  is the premier association of twenty-five (25) securities exchanges in Africa, five (5) associate members and two (2) observer members that have come together with the aim of developing member exchanges and providing opportunities for knowledge-sharing and collaboration.

Established in 1993 and headquartered in Kenya, ASEA works with African Member Exchanges to unlock potential of the African Capital Markets by, enhancing the visibility of ASEA members at an international level, with a view to attract capital inflows to African Capital Markets, Providing an authoritative information portal on African public markets and aggregated statistics on African Exchanges and Promoting market development among Member Exchanges amongst others

Karim Hajji noted that over the last two and a half decades ASEA has been resolute in its mission of being an enabler of African Securities Exchanges to become key economic and societal transformation drivers of the continent. “Undeniably for most of our African markets, the issue of liquidity and stimulating local investor participation still remain critical components that need to be addressed, we must remember that carefully cultivated liquidity allows investors to transfer risk to professional market makers via stable and reliable markets” he said
In addition, Karim noted that more widespread adoption of electronic trading could further enhance liquidity and reduce transaction costs for market participants by providing additional platforms to match buyers and sellers.

“Such platforms will, in some cases, help reduce the time required to locate buyers and sellers and improve the process of price discovery, the upgrade of trading, clearing and settlement systems is extremely pertinent in boosting the liquidity of our capital markets as it allows investors to realize the value of their investments more freely,” he said. Furthermore, it was underscored that robust and efficient market infrastructure with fair and open access boost liquidity by making it safer and cheaper to trade, hold and value capital market securities.

Deliberations at the conference highlighted that although these platforms can assist, African markets can benefit immeasurably from the presence of professional liquidity providers willing to buy and sell and accept a transfer of risk from investors. Experts underscored important drivers of market development which are more closely linked to capital market-specific functions as  firstly, the importance of focusing on global sustainability issues has  which has been prompted by growth in innovative sustainability-themed capital market products, such as renewable energy investments, green bonds, social-impact bonds, and sustainable funds.

ASEA President who is also Chief Executive Officer of  Morocco ‘s Casablanca Stock Exchange said this  has been fueled by investors increasingly demonstrating a desire to align with major global frameworks particularly the United Nations (UN) Sustainable Development Goals (SDGs) and Sustainable Stock Exchanges Initiative (SSE). “Secondly, high quality and timely information is the lifeblood of effective and viable capital markets thus the provision of high-quality information at low cost through well-developed disclosure regimes gives investors the means to value securities,” he said.

He further explained that a broad and diversified investor base provides a source of stable demand that supports liquidity, depth and stability, therefore greater bi-directional openness to international investors and issuers expands the pool of savings and investment products as well as promoting implementation of international best practices and standards. Giving key note address World Bank Group Country Representative and Special Envoy to SADC Mr. Xavier Furtado said economic development requires healthy growth of a nation’s financial sector.

He shared that initially nations tended to channel their savings and investment primarily, if not almost exclusively, through banks noting that  over time, savers in search of higher returns and firms seeking capital provide the foundation for the development of capital markets.
Commending the increasing trend of issuance and trading of bills and bonds of national governments, followed by the issuance and trading of bonds and equities of publicly held corporations; Xavier however said capital markets cannot function effectively unless a number of elements are in place.

“Exchanges and clearing and settlement systems must exist to enable trading, and money market arrangements are needed to facilitate settlements,” he said. The SADC World Bank Boss further explained that a legal system must exist to enforce contracts, adding that information about the financial soundness and future prospects of companies must be made available on a timely basis to give investors’ confidence to purchase corporate instruments, both debt and equity.

Chief Executive Officer of Botswana Stock Exchange Thapelo Tsheole said it was his company and Botswana‘s great honor to have hosted the historic event. “An event like this cannot happen overnight, the wheels started rolling a year ago when the BSE won the bid to host this year’s conference which required rigorous planning and a bird’s eye view for detail.

The Conference was sponsored by Botswana Tourism Organization, BIHL Group amongst others. “We have been fortunate enough to be backed by a slew of generous sponsors and a team of highly motivated and dedicated colleagues at the Botswana Stock Exchange and the ASEA Secretariat who played their roles exceptionally well,” said Tsheole.

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Business

Payless to partake in BSE’s Flagship Tshipidi program

28th June 2022
PAYLESS

Newly established wholly indigenous citizen owned retail chain Payless Retail (PTY) Ltd is set to partake in the first session of Botswana Stock Exchange (BSE)’s Tshipidi Mentorship Program (TMP) on Monday June 29th.

The TMP aims to train and capacitate SMEs so they can operate as corporates and eventually list on the local bourse. According to local bourse, BSE, the program aims to provide practical training to potential issuers through a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.

Payless Retail is a newly established supermarket chain whose mission is to become a convenient one-stop shopping destination as it is one of the Botswana oldest retailing brands.  It started off as Corner Supermarket in January 1976, and to date boasts of nine stores in, among others, Gaborone, Mochudi, Molepolole and Tlokweng. Payless was recently acquired by Ellis Retail Group, which is led by businessman Elliot Moshoke.

The takeover catapulted Ellis Retail to the envious position of being the first wholly indigenous owned major retail chain. “We jumped at this opportunity because it gave us a chance to prove to Batswana that the retail business is open and lucrative.”

The objective is to create a proudly Botswana retail chain that fully supports our national Vision, economic development and citizen economic empowerment ambitions,” Moshoke told BusinessPost.

He further emphasized that Batswana are capable and able to run large scale businesses hence they need to accept invite foreign investors who will come in to support us not take the business.
“Our win as Payless in the Fast Moving Consumer goods (FMCG) industry is a win for Batswana. We need their support in this difficult and challenging journey.

As you are aware, Payless is the only retail chain in the hands of Batswana ba Sekei. We need to take advantage of this to generate employment and create small businesses in retail and Agri businesses,” he explained.

The retailer has also partnered with Botswana Investment & Trade Center (BITC) on their #PushaBW campaign with a view to initiating earnest engagement with local producers to iron out bottlenecks and ensure seamless trading.

“Local producers have to be part of the phenomenal growth of the Payless brand. This will in turn facilitate employment creation and economic growth. We did this because we have the utmost respect for local manufacturers and producers,” he mentioned.

Payless is currently restocking all of its stores; a development that Moshoke says is testament to the retailer’s commitment to growing the brand and ensuring continuity of business. He further revealed that renowned retail suppliers like PST and CA Sales have reignited their trust in Payless, opening their doors for Payless as they have faith in the retailer’s new owners.

The takeover has reportedly saved more than 200 jobs and gave a new lease of life to the previously fledging Payless brand. According to a press release from the management team, the Payless work forces are also extremely excited about what the future holds. The TMP is a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.

The program is administered by experts within the listing ecosystem and seeks to bring the potential issuers closer to the listings advisers, investors and leaders of already listed companies.  “As a strategic initiative, the BSE decided to set up this mentorship program in a bid to assist SMEs to strategize, corporatize and acclimatize in order to list to access equity finance and expand operations,” said the BSE.

The TMP will avail to SMEs practical insights, knowledge and feedback from institutional investors, increased awareness of the BSE listing requirements as well as an intimate network of advisors and CEOs of listed companies. After training, Payless will graduate with improve governance structures and better knowledge of articulating its business strategy. The retailer will also gain increased visibility through BSE marketing platforms.

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Business

BITC assisted companies rake in P2.96 billion in export earnings

21st June 2022
BITC-CEO-Keletsositse-Olebile

Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.

In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.

The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.

With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.

Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.

BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.

During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.

BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.

As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.

In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.

BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.

Another tool used for export development by BITC is the Botswana Trade Portal, which has experienced some growth in terms of user acceptance and utilisation globally. The portal provides among others a catalogue of information on international, regional and bilateral trade agreements to which Botswana is a party, including the applicable Rules, Regulations and Requirements and the Opportunities for Botswana Businesses on a product by product basis.

The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.

BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.

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Business

Inflation up 2.3 percent in May

21st June 2022
Inflation

Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.

According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).

With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.

In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.

Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.

The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.

The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.

The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.

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