The Botswana Stock Exchange (BSE) has reported that 464.3 million shares worth P1 billion were traded in the local equity market between January 1st 2022 and November 30th 2022.
According to the BSE’ market performance report released this week, the top 3 traded companies during the period under review were Letshego which traded shares worth P492.6 million shares, followed by First National Bank Botswana (P87.9 million) and Sefalana (P63.4 million). The total turnover from these 3 companies accounted for 63.9% of total equity turnover with the leading counter Letshego accounting for 48.9% of total equity turnover.
The report states that Letshego’s considerable contribution to total equity turnover results from two significantly high trades of P183.0 million on 23rd March 2022 and P142.7 million on 17th June 2022, accounting for the two highest daily trades per counter in 2022 thus far. “Total equity turnover during the review period in 2022 amounted to P1.0 billion from traded volumes of 464.2 million shares, translating into an average daily turnover of P4.4 million. Local companies contributed 58.8% to total equity turnover or P591.9 million while local individuals contributed 4.8% during this period or P48.1 million to total equity turnover. Foreign companies contributed 31.6% or P318.4 million while foreign individuals contributed 4.8% or P48.5 million to total equity turnover respectively,” reads the report in part.
The report shows that total turnover during the same period in 2021 amounted to P1.8 billion, following trading of a total of 965.9 million shares during the period. The report added that the higher turnover was largely attributed to the historic transaction regarding Access Bank’s 78.15% acquisition of Banc ABC Botswana on 11th October 2021 which amounted to P1.1 billion and contributed 60.8% to turnover. During the same period in 2021, top 3 traded companies accounted for 74.9% of total equity turnover with the leading counter Access Bank accounting for 60.9% (P1.1 Billion) of total equity turnover.
The share price performance of listed companies for the period January 1st 2022 and November 30th 2022 shows that of the 31 listed companies, 9 depreciated in share price, 17 appreciated in share price while 5 experienced no share price change. The top gainer over the 1 January to 30 November period was Standard Chartered Bank Botswana (Stanchart) with an appreciation of 43.4%, followed by First National Bank Botswana and Letlole La Rona (Letlole) with gains of 34.4% and 23.5% respectively. BBS Limited experienced the biggest decline in share price after dropping by 40.5% followed by Prime Time Property Holdings and Minergy with declines of 23.8% and 20.0% respectively.
Commenting on the performance of Exchange Traded Funds (ETFs) in BSE during the last 11 months of trading the report noted that ETF turnover amounted to P122.3 million higher than P112.2 million recorded during the same period in 2021. In terms of volume, ETFs traded 782,862 units in 2022 and statistics in the report shows that the newly listed African Development Bank Fund (ADBF) ETF, New Funds ETF, New Gold ETF, BASBI ETF, New Pall ETF prices gained 0.2%, 4.3%, 4.5%, 5.0% and 6.5% respectively while New Plat ETF and BAMIB50 ETF declined by 5.4% and 26.1% respectively.
During the review period the value of traded bonds was P1.9 billion compared to P2.5 billion traded during the same period in 2021 and by the end of November 2022, the market capitalization of listed bonds stood at P26.0 billion.
The Financial Stability Council (FSC) update released last week shows that stock market capitalization at BSE is improving. “The total equity market value of domestic listed companies gained 9.4 percent, year-on-year, to P39.3 billion in September 2022 compared to September 2021 value of P35.9 billion. The gains reflect the overall recovery of the domestic market due to the opening of the economy and the resultant increase in economic activity. In general, the market is showing signs of recovery, with month-on-month increases in market capitalization, leading to a cumulative gain of P5.5 billion since March 2021.”
FSC is an agency comprised of senior officials from the Ministry of Finance and Economic Development (MFED), the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), the Financial Intelligence Agency (FIA) and BSE. The Council is chaired by Bank of Botswana Governor Moses Pelaelo.
The Council noted that liquidity in the local bourse is also improving, with the liquidity ratio rising to 5.9 percent in September 2022 from 1.8 percent in September 2021 and added that the improvement in stock market liquidity has been due to higher market activity in 2022 than in the corresponding period in 2021.
The Council stated that the domestic stock market is profitable. “The Domestic Company Total Return Index (DCTRI) appreciated by 11.6 percent in September 2022 against 7.9 percent in the corresponding period in 2021. This index provides a means for signaling profitability in the domestic stock market as it shows gains or losses in equity positions due to market capitalization appreciation or depreciation and dividend returns. Therefore, the higher appreciation of the DCTRI in 2022 shows that the domestic market is more profitable than it was in 2021.”
According to the Council the developments in market capitalization in the twelve months to December 2021 translated into a stronger performance of the domestic company index (DCI), as it turned around from a gradual decline that started in 2015 “The losses suffered by the local stock market since 2015 were precipitated by weak economic fundamentals, which partially translated into poor company performance. The DCI recovered to 7010 in 2021, further increasing to 7402 in September 2022, but recorded rising volatility potentially reflecting the inherently risky nature of equity markets. Nonetheless, investor confidence is expected to improve, especially on the back of strong economic prospects for 2022 and beyond.”
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.
African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).
AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.
The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.
The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.
To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”
Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.
The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.
“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.
“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.
The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.
About the World Economic Forum Annual Meeting 2023
The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,