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Botswana: New Products Coming to BSE
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Mmegi/The Reporter (Gaborone)
3 April 2008
Posted to the web 3 April 2008
Wanetsha Mosinyi
The Botswana Stock Exchange is relocating to its newly completed premises at the Fairgrounds Mall in Gaborone South today.
The local bourse is also hosting its inaugural Exchange Traded Funds conference to mark the relocation.
Today's conference has attracted fund managers, private bankers, investment advisors, brokers, and other capital market practitioners from Botswana and abroad.
"The idea for hosting this conferences is to teach investors on newly developed products as we continue to find products that will bring variety to the market," said BSE Product Development Manager, Thapelo Tsheole in an interview this week. "We also want to tap into new investors."
Tsheole said the new and bigger office block would give the BSE ample space for the installation of the Central Securities Depository (CSD) system scheduled for May. The CSD will allow electronic registration of share certificates.
After settling down at the Fairgrounds Mall, the Botswana Stock Exchange (BSE) will host a Securitised Assets Conference to create awareness on new investment instruments in the third quarter of this year.
Tsheole said on Tuesday that the conference was part of major projects that the local bourse will embark on this year in order to improve liquidity and tradability.
Although, the BSE's market capitalisation is comparatively high, liquidity is extremely low and one of the reasons for this imbalance has been identified as lack of instruments to draw out liquidity in the market.
The BSE is also introducing Exchange Traded Funds (ETFs) in Botswana to improve liquidity further. ETFs have been used to improve liquidity on other bourses like the South African Johannesburg Stock Exchange (JSE).
ETFs are index tracking funds secured by a basket of securities that are listed on an exchange, for example, by a bank or a fund manager, to allow investors to buy or sell securities consisting of a collective basket of shares or index as a single security.
The issuance of P5 billion worth of bonds of differing maturities over the coming years by government recently has also been heralded as a good initiative towards the development of the capital market.
The bonds were highly oversubscribed, signaling investors' thirst for investment instruments in the local market. BSE CEO Hiran Mendis told a conference recently that stocks in the local market are 90 percent skewed to institutional investors and fund managers who tend to buy and hold.
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This year the local bourse introduced three new indices, which effectively reflect on total returns of constituent securities. The Local Asset Status Index (LASI), the Foreign Resources Sector Index (FRSI) and the Domestic Financial Sector Index (DFSI) have replaced the Domestic Companies Index (DCI) and Foreign Companies Index (FCI).
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| Copyright © 2008 Mmegi/The Reporter. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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