Connect with us
Advertisement

BSE to collaborate with Zimbabwe Stock Exchange

Botswana Stock Exchange (BSE), one of Africa’s fastest growing securities markets, will join hands with Zimbabwe Stock Exchange (ZSE), one of Africa’s oldest bourses, a joint statement the two financial markets reveals.

The Thapelo Tsheole led bourse announced in a statement that they will sign a Memorandum of Understanding (MOU) as a basis for co-operation to help foster the prosperity of the two financial markets. “This will be to promote cross border investments, cross border listings and explore further opportunities for co-operation between institutions” reads the statement. The MOU will be signed by the CEO of Botswana Stock Exchange, Thapelo Tsheole and the CEO of the Zimbabwe Stock Exchange, Justin Bgoni in Harare, Zimbabwe on the 16th of September, 2019.

The statement further explains that a joint strategy has been unveiled between the two partners to provide the Exchanges with a framework for cooperation in areas of; product and market development, promotion of cross listings, which shall include the Exchanges formulating common fast track listing requirements for companies seeking secondary listing in either market, as well as a revenue sharing agreement on initial listing and continuing obligation fees paid by issuers.

Both exchanges will work on the creation of a framework, in conjunction with the respective regulators that will make it easier, quicker and cheaper for companies to cross list, by simplifying issues such as exchange controls, fungibility and regulatory harmonization. Another area of focus will be information sharing on key areas in developing capital markets.

Botswana Stock Exchange Chief Executive Officer Thapelo Tsheole, says the partnership between the two institutions will go a long way into contributing towards development of the SADC regional capital market and by extension Sub Saharan Africa. “We are happy to partner with the Zimbabwe Stock Exchange as an extension to our mandate and contribute not only to the development of the capital markets, but the region as a whole.” he said. Tsheole added that the collaboration will promote the values that BSE stands for as members of the SADC Committee of Stock Exchanges, as well as the African Securities Exchanges Association (ASEA).

For his part, the Tsheole’s counterpart Chief Executive Officer, Zimbabwean Stock Exchange Justin Bgoni, said it was a great milestone for the two financial markets to collaborate. ‘We are excited about the new partnership with Botswana Stock Exchange and the prospect of a gateway for our companies to raise hard currency on the exchange. This partnership will foster the development of the capital markets and contribute immensely to the economic development of Zimbabwe and SADC. For us, it is a practical step towards the upliftment of our two economies.’

The Zimbabwe Stock Exchange or ZSE, is the official stock exchange of Zimbabwe. Its history dates back to 1896[2], but has only been open to foreign investment since 1993. The exchange has about a dozen members, and currently lists 63 equities. There are two primary indices; the ZSE All Share and the ZSE Top 10. The Botswana Stock Exchange was established in 1989 as Botswana share market and became the Botswana Stock Exchange in 1994 by an act of parliament as a statutory parastatal under the Ministry of Finance. 

BSE demutualized to become a company incorporated under and in terms of the Botswana companies act in August 2018, subsequently changing to Botswana Stock Exchange Limited (BSE Ltd) and divorcing  the statutory entity tag to take in full swing the profit making company status generating return on investment for its shareholders. As of 2nd August 2018, the stock market now operates in the ownership setup similar to that of major exchanges such as JSE & Nairobi Stock Exchange. Botswana Stock Exchange is now a registered company under the Companies & Intellectual Property Authority (CIPA) Botswana.

Continue Reading

Business

Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020
Botswana-on-high-alert-as-AML-joins-Covid-19-to-plague-mankind-

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

This content is locked

Login To Unlock The Content!

Continue Reading

Business

Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

This content is locked

Login To Unlock The Content!

Continue Reading

Business

Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

Continue Reading
Do NOT follow this link or you will be banned from the site!