The Botswana Stock Exchange has recorded a total equity turnover amounting to P2 106.6 million this year, the second highest ever recorded in a similar period since the inception of the BSE.
The BSE year review as at 12th December 2014 indicated that trading was largely accounted for by local companies with dominance in the three quarters of 2014. Foreign companies, however, dominated in the second quarter and accounted for 52.7% of turnover. Contribution to turnover by local individuals improved significantly in the fourth quarter of 2014 reaching 7.4% of total turnover, although it remains below the level recorded in the same period in 2013.
According to the review, the Domestic Company Index (DCI) declined by 1.1% in Quarter 1 and appreciated by 2.0%, 3.3% and 0.7% in Quarter 2, Quarter 3 and Quarter 4 (period up to 12 December 2014) respectively. On a year to date basis, the DCI appreciated by 5.0% in comparison to an appreciation of 18.4% in the same period in 2013.
On a year to date basis the DCI came top and outperformed the JSE ALSI, SEMDEX, and MSCI Emerging Markets Index with gains of 5.0% in Pula terms. In US Dollar terms, the DCI still outperformed the three indices as the impact of the Pula depreciation against the US Dollar was minimal on the DCI returns relative to the impact the US Dollar appreciation has had on the returns from the JSE and the SEM. During this period the Pula depreciated by 8.2% against the US Dollar.
Since the start of the financial crisis in September 2008, the DCI has recovered by 17.5%. In comparison, the JSE ALSI and the SEMDEX have grown by 83.9% and 26.3% respectively. The review further points out that in Quarter 1 and Quarter 2, the Foreign Company Index (FCI) registered an increase of 0.1% and 0.2% respectively, and a decline of 0.5% in Quarter 3. In Quarter 4 (period up to 12 December 2014) the FCI lost 0.2%. On a year to date basis, the FCI declined by 0.3% up to 12 December 2014 in comparison to a depreciation of 0.1% in the same period in 2013.
Though the Stock Market is not the economy, the two are closely linked in many investors’ minds. The economy and the stock market however have a lot in common. While the stock market may respond to economic indicators or news, it doesn’t always respond in the manner that makes sense.Stock investors bet on the future, the stock market is a leading indicator for the economy. The BSE has listed three bonds and an Exchange Traded Fund (ETF) this year.