In a bid to cater for the Small and Medium Enterprises (SME’s), Botswana Stock Exchange (BSE) will soon introduce a board specifically for the SME’s, BSE CEO Thapelo Tsheole said on Thursday. Tsheole revealed this at the second Annual Listings and Investment Conference which was held under the theme, “The BSE as a gateway to raising capital”. The SME board will be called Tshipidi, according to Tsheole, but details of the board are yet to be shared, meaning that currently it just remains an objective. The SME’s are said to be finding it hard to list due to all the processes and costs that come with listing, hence the stock market is made up of only established entities. It is anticipated that Tshipidi will address the limitations of the SME’s to list. Besides lack of funding, speakers who made part of the panelists at the event agreed that SME’s have too many perception regarding listing company shares on the stock market. A guest speaker at the conference, Staci Warden – the chairman of U.S based Milken Institute – said there is only about 6,000 listed SME’s globally, a small fraction by any standards. Warden said some company shareholders find it scary to list since that would mean giving away a certain portion of their companies to the public and also other pressures that come with listing. She said some potential listed companies are turned off by uncertainty over the regulatory environment and suggested that stability is needed in the regulatory framework.
One panelist Mohamed Osman - the Finance Director of the listed Sefalana Group – said there is a general feeling of resistance due to the cost of listing. He said the real challenge is ensuring that infrastructure is in a place that allows a company to list, adding that most of the SME’s are not structured properly as it takes time to build a company to the levels required for listing. Chairman of Phakalane Estates David Magang, who also formed part of the panelists on day, said almost all companies in Botswana are very small while the costs associated with listing are high which involves paying lawyers, transfer secretaries and a whole lot of other services involved in the process. Vice President Mokgweetsi Masisi, who officially opened the conference, said by increasing the number of listings, the liquidity of the local market will be enhanced, thus attracting more participants to the capital markets. “This will ultimately assist the Botswana Stock Exchange to become a World Class Securities Exchange; which will in turn attract Foreign Direct Investment (FDI),” said the VP. Masisi said it is important that the private sector understand the emerging economic challenges to traditional industries and pursue other avenues for growth. He said this is particularly vital for an economy like Botswana, where the private sector is highly dependent on government spending, which is unsustainable and not always reliable. Masisi said the focus should be on strategic alliances with government to create innovative and technologically-advanced and driven enterprises, with focus on sustainable value creation. “I implore the private sector to harness the benefits of renewable-resources, invest in research, innovate and nurture entrepreneurship as opposed to tenderpreneurship,” he said, adding that this will go a long way in saving costs to businesses but also contribute to the long-term welfare of the nation. Masisi called on the private sector, especially the SME’s to position themselves by listing on the BSE in order to service the increasingly sophisticated needs of the growing middle-class in Botswana and further afield.