Botswana Stock Exchange (BSE) will soon implement new conditions of listing that will govern the arrival of new companies at the stock market. Tsametsi Mmolai – Listings and Trading Manager at the BSE – said on Wednesday during a follow up seminar on the listings conference held in March this year that they have proposed a few conditions for listing that will come into effect once consultations are complete. The proposed rules will require prospective listed companies to have its directors and senior management to possess collective appropriate experience and said they will have to be satisfied with the expertise for a company to tick one of the boxes for listing consideration. Where there is a controlling shareholder, the new rules will require that appointments of additional independent non-executive directors be made for purposes of compliance with the corporate governance code. Companies looking to come to the exchange will also have to have their directors go through a mandatory induction workshop to help them know what is exactly expected of them as a listed entity. The conditions, which were supposed to come into effect in September this year, had to be deferred to allow further consultations, according to the BSE CEO Thapelo Tsheole.
Besides corporate governance issues that have to be sorted out before the company can list or after listing, the BSE also seeks to increase subscription capital for listing companies and for main board minimum subscription capital will be increased to P5 million from a current P1 million. For venture board, listing companies would have to have a minimum subscription of P2.5 million from half a million Pula that is currently the minimum requirement. As a means to stimulate trading in the stock market, the BSE further proposes to have main board companies have a minimum free float of 30 percent of the total shares and 10 percent for venture board. Mmolai said the minimum free float of shares is to avoid a situation where investors hold shares for a long period, leaving no room for further trading to occur. The seminar, which was a follow up to the inaugural listing conference, sought to further impart information on likely listed companies in Botswana. However representatives of the companies in attendance said listing seems to be a costly exercise that has the potential to deplete their coffers.
However Tsheole maintained that the BSE was the cheapest in the region and other markets, adding that it would cost below P300 000 in fees paid to the BSE. The BSE had invited successful listed companies among them Turnstar and Letshego to come and share their experience with the unlisted companies. Turnstar Managing Director, Gulaam Abdoola, advised unlisted companies not to rush into listing, saying that they first have to consider where they want to go as a company and take into consideration expansion strategy. Abdoola said Turnstar as a listed company was listed when they developed Game City shopping mall, the company’s flagship investment, when local pension funds approached them for investment but would only do so only if the company was listed. For his part Colm Patterson said when Letshego expanded outside Botswana; it had to partner with some local financial institutions wherever they went, adding that the strategy has worked very well for the group.