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BSE fired up for Listings conference

The Botswana Stock Exchange on Thursday held a media briefing for their upcoming 2nd annual listings conference to be held on the 9th of March.


In a written statement, the BSE says the theme for this year’s conference is “The BSE AS A GATEWAY FOR RAISING CAPITAL” and that the overall aim of the conference is to open up the BSE to the business community and bring together the BSE, private companies with the potential to list on the BSE, listed companies and experts in capital markets to discuss the value added to a private company by a listing on a stock exchange, the listing process and requirements.


“The BSE recognises the fact that the survival of the stock exchange is underpinned by its attractiveness towards not 0nly investors, but also companies. As such, the supply side of the market, being issuers of securities, has to be consistently nurtured. Because of this, it is essential that we as the BSE host this conference annually to spur the interest and to maintain a large platform where we can address issues relating raising capital by listing,” the statement read.


Still at the media briefing, Mr. Thapelo Tsheole, BSE CEO, told the audience that they go to the conference with strong intentions to increase the number of companies listed on the BSE. Mr. Tsheole said their efforts were emboldened by the success of the inaugural Listings Conference held last year. He sail while in 2016 they invited 150 companies, this year’s conference will be graced by the presence of the more than 300 invited businesses.


Mr. Tsheole said the BSE continues with its awareness raising campaigns in a bid to woe investors and companies. Furthermore, he said in these campaigns they invite listed companies to share their experience in the local bourse as well as other value adding companies, such as law and accounting firms, to help explain the journey to listing.


He explained that BSE contributed to the economy by offering different classes of investments. He said that they will be aggressive in pursuing the expansion of the BSE by increasing listed companies. To achieve this, Mr. Tsheole said they will be targeting mature citizen owned companies that have prospects to grow in the stock market even though it will prove to be a difficult undertaking.


“It is very difficult to convince Motswana to sell part of what they own,” he said before adding that this requires time as consultations tend to take long. The upbeat CEO said that they are pursuing some companies that they spotted at the previous conference and that talks and consultations are ongoing.


The timing of the conference comes at a time when BSE board has just recently approved the institution’s new 2017-2021 strategy that is big on expansion. In crunching the numbers, Mr. Tsheole said, the currently listed 34 companies make up 34% of the country’s GDP but under the new strategy are targeting to hit 40% of the GDP in five years.

 

He says this will be achieved through growing the number of domestic listed companies from 24 to 30. Mr. Tsheole said this will not be easy as it is difficult to get a listing in African stock markets. Still on the numbers, the BSE seeks to increase foreign listed companies from 10 to 15, number of listed bonds from 39 to 50 and increase the number of listed Exchange Traded Funds (ETFs) from 4 to 10.


“The strategy is very clear. It’s in the numbers,” said Mr. Tsheole. The BSE CEO says not only will they increase the number of listed companies but they are also introducing other asset classes. Currently the BSE offers four asset classes; Equities, Corporate and Government Bonds and ETFS. Amongst the touted investment products to be introduced are derivatives, Commercial Papers and Certificates of deposit.


Mr. Tsheole says their recent efforts align with their enduring interest to see many citizens participating in the stock market. To this end, the BSE will try to increase the number of investors in the BSE from 78000 to 100000 in 5 years. He said these are the same people who are powering the small, medium and macro enterprises (SMMES). Mr. Tsheole then said SMMEs are the backbone of the economy yet face immense challenges.


“There is a critical need for corporate financing especially in the SMMEs sectors,” Mr. Tsheole explained and also added that they are encouraging other stakeholders to come on board to solve this challenge. He said accounting and law firms can provide their expertise to help SMMEs access the appropriate funding method. Mr. Tsheole said part of the efforts to help the SMMEs may include introducing a specialised SMME board which will have special listings requirements.


The media was also briefed by Ms. Tebogo Keepetsoe, Public Relations, Communications and Marketing manager at Botswana Insurance Holdings Group (BIHL). BIHL is the diamond sponsor for the upcoming conference. “BIHL group has been a long standing listed company on the BSE. And I think if anything, it’s important that I share some thoughts on our BIHL journey to listing. And I’d also like to share on some key aspects that we have found of benefit from being a listed company,” she said.


Ms. Keepetsoe says BIHL has enjoyed a long history at the BSE, starting in 1991 with an oversubscribed initial public offering (IPO) that floated shares at 0.22t, and 26 years later the shares are trading at more than P17. She says as the main sponsors of the upcoming listings conference, it is a testament of their belief in the listing process and as a company they hope it will encourage other local companies to list on the BSE, especially if they are reviewing their growth strategies.


She said some of the benefits that accrued to them after listing include access to large scale fundraising as well as increased exposure to raise asset value through acquisitions. Moreover listing has brought them closer with the public and potential investors. According to Ms. Keepetsoe, this has greatly enhanced the group’s credibility and raised its corporate profile to expand in other markets.


“The BSE itself is an incredibly successful bourse to list on. It currently stands as the third largest in the region, in terms of market capitalisation. A feat which, if I may, commend Mr. Tsheole and his team for achieving at such a phenomenal pace, considering that our local economy still has a lot of growing to do,” she said.  


The BSE also raised similar praise from Ms. Tumi Ramsden, Head of Corporate Affairs, Brand and Marketing at Standard Chartered bank Botswana, who said that the bank shares a fruitful relationship with the BSE ever since it listed when the stock market was still at its infancy. Ms. Ramsden says the listings conference provides a platform to participants to find opportunities and collectively contribute to the growth and health of the economy.

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Dark days as Aviation industry collapses

22nd November 2020
Air Botswana

As the Aviation industry takes a COVID-19 pummeling, for Africa the numbers are staggering, Chief Executive Officer of the International Air Transport Association (IATA), Alexandre de Juniac has observed.

Speaking recently at the African Airlines Association (AFRAA) has been hosting an Annual General Assembly, de Juniac said traffic is down 89% and revenue loses are expected to reach $6 billion. And this figure is likely to be revised downwards in the next forecast to be released later this month. “But the impact is much broader. The consequences of the breakdown in connectivity are severe,” he surmised.

According to de Juniac, five million African livelihoods are at risk while aviation-supported GDP could fall by as much as $37 billion. That’s a 58% fall.

“We have a health crisis. And it is evolving into a jobs and economic disaster. Fixing it is beyond the scope of what the industry can do by itself.”

He said they need governments to act, “And act fast to prevent a calamity.”

“We are in the middle of the biggest crisis our industry has ever faced. As leaders of Africa’s aviation industry, you know that firsthand. Airline revenues have collapsed. Fleets are grounded. And you are taking extreme actions just to survive. We all support efforts to contain the COVID-19 pandemic.  It is our duty and we will prevail. But policymakers must know that this has come at a great cost to jobs, individual freedoms and entire economies,” he said.

de Juniac used the AFRA general assembly platform to amplify IATA’s call for governments to address two top priorities: “The first is unblocking committed financial relief. Airlines will go bust without it. Already four African carriers have ceased operations and two are in administration. Without financial relief, many others will follow.”

Over US$31 billion in financial support has been pledged by African governments, international finance bodies and other institutions, including the African Development Bank, the African Union and the International Monetary Fund.

Unfortunately de Juniac pointed out, in his words, “Pledges do not pay the bills. And little of this funding has materialized. And let me emphasize that, while we are calling for relief for aviation, this is an investment in the future of the continent. It will need financially viable airlines to support the economic recovery from COVID-19.”

The second priority, according to IATA is to safely re-open borders using testing and without quarantines.

“People have not lost their desire to travel. Border closures and travel restrictions make it effectively impossible. Forty-four countries in Africa have opened their borders to regional and international air travel. In 20 of these countries, passengers are still subject to a mandatory 14-day quarantine. Who would travel under such conditions?” de Juniac quizzed rhetorically.

He suggested that countries should adopt systematic testing before departure provides a safe alternative to quarantine and a solution to stop the economic and social devastation being caused by COVID-19.

He admitted that it’s a frightening time for everyone, not least the millions of people whose livelihoods depend on a functioning airline industry. Right now, de Juniac said there essentially is no airline industry. He cited the example that China’s largest airlines sound optimistic, but in a vague way. “They gave no hard data about current yields, loads, or forward bookings, discussing only developments in 2019. Boy, does that seem like ages ago.”

Aviation’s darkest days

The IATA CEO said these are the darkest days in aviation’s history. “But as leaders of this great industry I know that you will share with me continued confidence in the future.

Our customers want to fly. They desire the exploration that aviation enables. They need to do international business that aviation facilitates. And they long to reunite with family and loved ones.”

He said the industry will, no doubt, be changed by this crisis, but flying will return. “Airlines will be back in the skies. The resilience of our industry has been proven many times. We will rise again,” he said.

de Juniac said Aviation is a business of freedom. “For Africa that is the freedom to develop and thrive. And that is not something people on this continent will forget or lose their desire for.”

 

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Inflation increased to 2.2% in October 2020

22nd November 2020

Headline inflation increased from 1.8 percent in September to 2.2 percent in October 2020, but remained below the lower bound of the Bank’s medium-term objective range of 3 – 6 percent, and lower than the 2.4 percent in October 2019.

According to Statistics Botswana, the increase in inflation between September and October 2020 mainly reflects the upward adjustment in domestic fuel prices {Transport (from -3.9 to -2.5 percent)}, which is estimated to have increased inflation by approximately 0.29 percentage points.

“There was also a rise in the annual price increase for most categories of goods and services: Alcoholic Beverages and Tobacco (from 6.2 to 6.6 percent); Clothing and Footwear (from 2.5 to 2.7 percent); Communications (from 0.6 to 0.9 percent); Housing, Water, Electricity, Gas and Other Fuels (from 6.4 to 6.6 percent); Recreation and Culture (from 0 to 0.2 percent); Miscellaneous Goods and Services (from 0.7 to 0.9 percent); Food & Non-Alcoholic Beverages (from 4.2 to 4.3 percent); and Furnishing, Household Equipment and Routine Maintenance (from 2 to 2.1 percent). Inflation remained stable for: Education (4.7 percent); Restaurants and Hotels (3 percent); and Health (1.5 percent). Similarly, the 16 percent trimmed mean inflation and inflation excluding administered prices rose from 1.8 percent and 3.1 percent to 2.2 percent and 3.4 percent, respectively, in the same period.”

[Source: Bank of Botswana]

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BDC injects further P64 million into Kromberg & Schubert

22nd November 2020
BDC

Botswana Development Corporation (BDC) has to date pumped a total of P100 million into the expansion of Kromberg and Schubert, a car harnessing manufacturing company, operating from Gaborone Old Naledi.

At the official ground breaking ceremony of the company‘s new warehouse today, BDC Managing Director, Cross Kgosidiile revealed the wholly state owned investment corporation has pumped P64 million into the expansion which entailed building of the new warehouse.

Kgosidiile explained that this follows another expansion project which was successfully launched in 2017, in which BDC invested P36 million, bringing the total investment into Kromberg at P100 million. The MD also acknowledged Botswana Investment and Trade Centre (BITC) as a partner in the project and for having facilitated the acquisition of the land.

 

Giving a keynote address, Minister of Investment, Trade & Industry, Peggy Serame highlighted the importance of infrastructural development in growing the local manufacturing sector and transforming the economy of Botswana.

Serame underscored the value of strategic partnerships between Government and the private sector, noting that when the two work together and pull together in one direction results will be evident and jobs will be created.

“With the prevailing conditions of depressed economy occasioned by COVID-19 pandemic, government is reliant on entities like BDC to bring in revenue and acceleration of private sector development in line with its mandate and strategic plan. This plan is supported by the need to invest in growth sectors and accelerate the implementation of the Economic Diversification Drive,” Serame said.

Minister Serame noted that the partnership between BDC and Kromberg & Schubert begun in 2017 when the P36 million, 4100 square metres factory expansion for the company was launched.

 

She said the launch of the 7320 square meters factory expansion, to be built at the tune of P64 million signals the continuation of the good partnership between the two companies.

 

“I must commend BDC for their continuous efforts to build partnerships with the private sector geared towards contributing to economic development of this country.”

 

Minister Serame also added that BITC through its robust investor aftercare programme continues to provide value added and red carpet to Kromberg and Schubert under their One Stop Service Centre.

 

“In this regard BITC facilitated acquisition of land to enable this expansion. I therefore would like to commend BITC for their timely facilitation to make this expansion possible,” the minister said.

 

Kromberg & Schubert was incorporated in Botswana in 2009; The Company has grown to asset its position as a significant player in the regional automotive industry value chain.

 

The company is also a critical player in the economic development of Botswana, it currently employs 2100 Batswana across its operations. Kromberg exports on average P2.0 billion worth of goods annually, contributing significantly to foreign exchange.

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