The Minister for Finance and Development Planning, Baledzi Gaolathe told Parliament last week that the Botswana Stock Exchange(BSE) reacted rather late in mid-October last year to the world recession.

"While world markets started reacting to the financial crisi s around August and September 2008, the Botswana market reacted to the crisis rather late from mid-October 2008," Gaolathe said.

The minister said when other markets were falling in response to the financial crisis, the Domestic Company Index (DCI) was on an upward trend, appreciating by 18.5 per cent while the Foreign Company Index (FCI) declined marginally, by 1.4 percent at the same time.

Gaolathe said both the DCI and FCI started declining marginally during the fourth quarter, October-December, 2008. However the finance minister said the extent to which the Botswana market will be affected by the financial crisis in the long term will depend on how long the crisis will last.

The minister also said the government has also budgeted for the establishment of an automated trading system for the BSE which will facilitate the electronic trading of securities.

Meanwhile, the minister said, despite this year's setback, Botswana has experienced rapid growth in retirement funds over the last several years, which has in turn led to an industry comprising service providers such as benefit administrators, investment consultants and asset managers.

The minister also said that of the P29.1 billion of pension fund assets that exist as of 30 November, 2008, P11.7 billion or 40 per cent is being held locally in different investments such as equities, bonds and real estate while P17.4 billion or 60 per cent is being held offshore, compared to 41 per cent that was invested offshore as at 30 November 2007.

The minister said as a result, the pension fund assets reduced by 10 percent from P32.2 billion in 2007.