With the Botswana Stock Exchange (BSE) set to hold its 3rd Annual Listings Conference next week the company’s CEO Thapelo Tsheole fields questions from KABELO ADAMSON about the impact they are making.
How do you rate the success of the conference in attracting firms to list on the BSE so far?
TSHEOLE: The conference itself has been effective in demystifying the misconceptions that exist about listing in the stock exchange. Most importantly the conference has played an important role in education companies about the process of listing. I am happy to say that our listings in 2017 have echoed the fact that companies are becoming more educated on the benefits of listing. In 2017, we listed three companies on the equity board and eight bonds were issued. We still hold meetings with companies and we expect more listings soon.
How many companies have been invited to take part in this year’s edition?
TSHEOLE: This year we are expecting 400 delegates at the conference and we expect about half of them to be business owners.
How many companies have listed on the BSE since the introduction of the listings conference?
TSHEOLE: Five companies have issued shares since the inception of the Listings and Investment conference in 2016.
Is the conference achieving what is set to achieve?
TSHEOLE: Yes, the conference is achieving the set objectives which are to engage with companies that have the potential to list on the BSE and discuss the advantages of listing a company on a stock exchange as well the process involved. This is echoed by the fact that companies are becoming more aware of the benefits of listing and demonstrating that by issuing securities on the BSE. We see a lot of interest again from citizen-owned companies to list.
Has the BSE set any target for the number of companies to list for a certain period?
TSHEOLE: Absolutely yes, the BSE has a 5-year strategy which began in 2017 and aims to increase the number of domestic companies listed from 24 to 30, increase the number of foreign companies listed from 10 to 15 and to increase the number of bonds listed from 39 to 50 by 2021. For 2017, for example, the target was to attain two equity listings and we ended up listing three companies, we targeted to have two bonds issued and we ended up with eight bonds. This definitely demonstrates the appetite from the market to raise capital through the stock exchange.
Listing is said to be a very expensive exercise, how do you cater for the SMEs so that they too can enjoy the benefits of listing?
TSHEOLE: The fees that a company attracts during a listing are largely to do with the amount of work that is required to get the company ready to a level where it meets the corporate standards. Some companies use their internal resources as much as possible to get around the costs that could be accrued.
From your observation, is the appetite to list, especially from native companies high or low?
TSHEOLE: Judging by the level of enquiries and engagement with companies, there is definitely a high appetite to list. The enquiries have also increased since we announced that the BSE will introduce an SMME Board to be known as the Tshipidi Board. We work hard to get Batswana-owned business to realise their growth potential through the stock exchange and we look forward to having more of these companies listed on the BSE.
What steps has the BSE taken to make the stock market attractive?
TSHEOLE: The stock market is generally attractive due to the large pool of capital from pension funds looking for assets. We are also doing so by increasing the number of domestic and foreign companies as well as the number of asset classes. We also work towards increasing the number of investors.
Kindly provide an update on the BSE demutualization process?
TSHEOLE: Substantial progress has been made in the much anticipated demutualisation of the BSE which will see the conversion of the BSE from being a statutory body to a public company. The valuation of the Exchange has been completed and due process of awarding shareholding by the Minister of Finance and Economic Development will commence. This milestone will officially separate ownership rights and trading rights of the Exchange and will be in line with global trends. At the present moment, we cannot say when exactly the process will be complete. We anticipate that by the end of 2018 the process will be complete.
Once complete, how will the process improve the BSE performance?
TSHEOLE: There will be no change in operations, but transformation of the structure of the exchange through demutualisation leads to an improved corporate governance structure and this improves investor confidence and maximises value creation.
Will the BSE also self-list, as it is common in other countries?
TSHEOLE: The trend globally is that after demutualisation, stock exchanges self-list. Self-listing is an accepted practice in a lot of markets and it is a practice that we would like to adopt at the BSE.