BSE changes tact
BSE CEO: Thapelo Tsheole
In an effort to expand its reach and deepen the understanding of financial markets, the Botswana Stock Exchange (BSE) has launched its newly revamped social media platform as part of its outreach programme to existing and potential investors. The BSE will rely on popular social networks such as Facebook and Twitter to disseminate information in a timely manner. Botswana has one of the world’s highest mobile penetrations hovering around 170 percent as reported in 2015, this, the BSE hopes to tap in it.
The BSE head honcho, Thapelo Tsheole says this represents an exciting times both for the BSE and investors. “This is one of our strategies in order to disseminate information to better serve the many investors that want to explore the possibilities of investing in the BSE. It’s a very exciting time for us and as you might realise information is very important in investment and therefore I think we are getting a step ahead in terms of disseminating information for people to make investment decisions wisely and for people to have information in order to manage and run their investment portfolios,” beamed the CEO in a video posted in their facebook page.
The latest revamp of the social media platforms adds another chapter to Tsheole’s vision of positioning the BSE into a “destination of choice for investors by ensuring a robust stock exchange with quality equity, bond and alternative listings; a deep and liquid trading environment and world class regulatory and supervision environment”, something which had said in earlier interviews .
In April, the BTCL IPO ushered in more than 50000 citizen investors, prior to that there were only 28122 registered Central Securities Depository Accounts (CSD). Not only did the BTCL IPO bringing a record breaking number of retail investors to the local bourse, it has also prodded the BSE to improve on its information dissemination platforms to help ease in new investors who know so little about the stock market. The revamped media platforms will be an extension to the broader strategy which includes the ongoing recruitment of Market Development Manager as well as the tender floated for submission of proposals for the design, development and implementation of a new and modern website with an integrated Data Analysis and Reporting System.
The BSE which has grand plans that include promoting wealth creation through citizen empowerment and participation has been busy at work. Just recently this year, the BSE held its inaugural BSE Listings conference to woe businesses that aspire to list on one Africa’s most stable and sound stock market. Moreover, the BSE has been engaged in a series of awareness campaigns that seek to engage those interested in the stock exchange. “The BSE undertakes numerous initiatives with a view of reaching out to retail investors and promoting financial literacy. In addition to an array of programs across various radio stations in which the BSE features. The design of the program is a much more efficient way of dealing with trending stock market issues as listeners are able to enquire and get instant feedback,” Kopano Bolokwe, the BSE acting Product Development Manager, explained.
Meanwhile, the BSE is making headways in becoming a formidable player in Africa’s stock markets with the recent two successful IPOs in less than two months, giving investors more options on where to park their money. The highly publicised BTCL IPO listed 1.05 billion issued securities, of which 49% are reserved for citizens while the government remained the majority shareholder. The BTCL share offer price was at P1, however on the first month of trading the stock grew by as much as 35%, but by the end of April the share price was retreating and is now at P1.14.
Far Property Company (FPC) this week listed on the BSE main counter, joining the other 5 existing property companies and bringing the total number of listed companies on the main board to 24. Furthermore, FPC with its issued 380 million units saw its share price jump by ).8% from the offer price to close at P2.59, giving it a market capitalisation P984.2 million, and making it the 3rd most valuable listed property company on the BSE. The founders of FPC have now become legends in successfully listing companies; their maiden listing was a resounding success as they listed Choppies, first in the BSE and subsequently in the Johannesburg Stock Exchange. In this listing, the founders are looking at a windfall of about P102 million while the company will also pocket the same. The reason for listing the company was to raise funds for ongoing projects and other future projects.
The BTCL IPO which was oversubscribed has brought in twice the number of previously existing investors, with majority being first time buyers of equity . The FPC IPO even though was not as publicised as that of BTCL was also oversubscribed, and in the process attracted the attention of 646 applicants. The oversubscription of the IPOs signals an increasing appetite for the stock market as local investors seek returns in the stock exchange that has averaged returns of 11.58% last year. This has delighted the BSE as the entrance of more retail investors will help improve the liquidity of the local bourse. Over time there has been frustrations in some quarters that the dominance of institutional investors in the BSE has perpetuated the BSE’s illiquidity, largely in part to their investment philosophy which involves buying and holding stocks for long investment horizon period.
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Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.