Sunday, December 3, 2023

BSE boss commends Barclays for ETF secondary listing

The Botswana Stock Exchange (BSE) has commended Barclays Bank of Botswana and the Barclays Africa Group for promoting investment in the country through a secondary listing of the Inflation Linked Bond Index (ILBI) Exchange Traded Fund (ETF) on the local bourse last week.

The ILBI ETF will provide investors with low-cost convenient alternatives to traditional non-listed products. It can also act as a building block for investors to use when constructing their own portfolios. Absa Capital, a member of the Barclays Africa Group, has previously listed both the Platinum and Gold ETFs on the BSE; and the ILBI ETF was the third listing of an ETF product by the Group. In an interview with Sunday Standard, BSE Deputy Chief Executive Officer Thapelo Tsheole said the listing was in line with the local bourse’s strategy of ensuring that Botswana becomes a destination of choice for investors through establishment of a robust stock exchange that offers quality equity, bond and alternative investments listings.

“Our stock exchange must offer investors a deep and liquid trading environment and world class regulatory and supervision. This strategy has culminated in the pursuit of several initiatives. The BSE has intent to implement securities borrowing or lending and this concept is still at an initial stage,” said Tsheole.

He further revealed that Barclays is listed on the stock exchange and has previously issued a number of debt instruments.

“It is especially pleasing for me that the Barclays Africa Group is supportive of developing the market in Botswana through several listings of Exchange Traded Funds developed within the Group. As you know, Absa Capital, a member of the Barclays Africa Group, has listed both the Platinum and Gold ETFs on the BSE and this is the third listing of an ETF product by the Group,” he said.

The BSE recently introduced market-making for all the listed securities, aimed at ensuring that there is always a trading counterparty on either the buy or sell side, thus improving liquidity on the exchange. The draft market-making rules were completed in January 2015, and are waiting for approval by the Regulator. For her part Barclays Managing Director (MD) Reinette van de Merwe said the ILBI ETF will provide investors with an opportunity to invest in a de facto South African government inflation bond benchmark index, while simultaneously increasing the liquidity of the BSE and deepening financial markets in Botswana. She further revealed that it is the first time that the ILBI ETF has been listed outside South Africa.

“We are all aware that the banking landscape is changing at a very fast pace and at Barclays we are rising up to challenge,” said van de Merwe.

She further said the market has been yearning for such products, which allow institutional investors to invest more in local products. She added that in the recent past, local investors have been taking their funds offshore due to lack of a diverse range of investment products locally.

 “The listing provides investors with a hedge against inflation; it helps investors diversify their investment risks and is suitable for investors seeking low cost, convenient alternatives to traditional non-listed investments,” said van de Merwe.


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