Sunday, May 29, 2022

BSE Bill goes through second reading

The Botswana Stock Exchange (BSE) transition bill went through a second reading in parliament this past week.

Minister responsible for Finance and Development Planning, Kenneth Matambo presented the Bill which he said will allow the bourse to be registered as a company in which government will control the majority of the shares.

The finance Minster further told parliament that the drafting of the Bill “involved extensive consultations with a wide range of stakeholders, including stock broking members and the Non-Bank Financial Institutions Regulatory Authority”.

At the same time, insiders at the finance ministry previously told Sunday Standard that the promulgation of the BSE Transition Bill will also support the implementation of another bill, the Securities Bill.

The proposed Bill also suggests that the Botswana Stock Exchange Security Fund be given a new name of Investor Compensation Fund, which will make it possible for investors to be reimbursed and or compensated if they have endured losses at the hands of the stock broker due to dishonesty or liquidation.

Assets and Liabilities are also to be continued even after incorporation the bill further says. “This will help provide a more commercial and flexible platform of operation while taking advantages of development opportunities of the capital markets,” said Matambo.

Meanwhile going forward, household participation at the BSE could increase, in addition to listing of private corporate securities, given the envisaged involvement in privatisation of parastatals and any increase in government securities as exchanges exist to befit a variety of stakeholders other than brokers.

Bank of Botswana suggested in its annual report that there could be more investment by locals on the domestic bourse as the planned privatisation of government entities gather pace.

“Households also invest in the BSE through pension funds and unit trusts,” said the reserve bank, adding that the pension industry had invested a total of P17.8 billion in both equities and bonds by the end of 2012.

The bank said in its 2013 annual report that direct equity shareholding by the household sector through the Botswana Stock Exchange (BSE) amounted to 16.9 percent of total market capitalisation at the end of 2012. Already, privatisation is advancing with Botswana Telecommunications Corporation (BTC) and National Development Bank (NDB) at the forefront.

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