BSEL CEO urges Govt
Botswana Stock Exchange Limited (BSEL) CEO Thapelo Tsheole says government should increase its borrowing from the local bond market in order to develop the local debt market.
Tsheole was speaking on Thursday during the Opening Bell Ceremony – a monthly activity. Currently government bonds stand at P10.2 billion while corporate bonds are valued P5.9 billion, making a total of P16.1 billion.
“Our argument is that government still needs to increase its borrowing in the domestic economy because at the level of P10.2 billion, it is still small to be able to develop the local debt market,” said Tsheole, adding that the ideal target for Government should be at least P15 billion for it to have an impact in the domestic debt market.
Tsheole explained that the importance of government borrowing from the domestic economy is in such a sense that it is in the best interest of government, meaning that it will develop the yield gap and corporates will use this yield gap to issue more debts, resulting in the growth of the whole economy as entities will have access to funding.
“We have seen improved liquidity in the bond market, last year as of 30 September we traded about P268 million and this year we have traded about P1.2 billion which is a great improvement,” he said.
As of end of last month, there were a total of 44 bonds listed on the BSEL. According to Tsheole, the BSEL is still on the negative, in line with the trend that has been seen in the continent with the majority of exchanges in emerging markets still on the negative, saying it is the nature of the stock market.
The BSEL recorded a turnover of P1.2 billion up to date with an average daily turnover of about P6.7 million which Tsheole said is low when compared to P11.5 million the local stock market experienced last year.
“I think one of the contributing factors was that there was a tender for BPOPF to re-align and re-issue mandates and I think when that happened the fund managers came to work on their portfolios,” Tsheole explained.
Tsheole said another factor is that when the market is going down, investors tend to hold onto the stocks and not to buy on them.
During this week’s Opening Bell Ceremony, the BSEL had invited local business owners to take part in a discussion surrounding the current landscape – challenges and opportunities around family-owned businesses.
“There has been a lot of research in terms of family-owned businesses, their role in the economy, and their importance in the development of the capital market,” said Tsheole.
One of the invited guests, Abel Monnakgotla of AT&T Monnakgotla, said they are currently reviewing their company structure and putting in place a corporate governance one that will see the group leaping into a new phase.
“We have since appointed people with different expertise,” he said, adding that the group will eventually list at some time now that there are a number of options available on the BSE such as Serala and the Tshipidi which will cater for the SMEs.
Another businessman, Charles Tibone said the objective as a private business has always been to grow the balance sheet. He said there is a perception that family-owned businesses are not taken seriously but on the contrary he said these are the entities that drive the economy.