It is turning out to be a good year for the local market, as it continues its upward momentum, and now registering its highest turnover in history.
For the year-to-date, the Botswana Stock Exchange’ Domestic Company Index, which tracks share price performance of the 24 listed companies on the domestic counter, gained 0.46 percent.
On Monday, the bourse’s chief executive officer Thapelo Tsheole announced that the local stock exchange recorded the highest turnover in a single day atP1.1 billion, the biggest turnover ever recorded by the BSE since inception.
This turnover is a result of Access Bank’s 78.15 percent acquisition of BancABC Botswana which was completed last week. BancABC Botswana listed on the BSE in December 2018, putting up 725 million shares or 79.5 percent which was owned by the parent company ABC Holdings Limited. Last year it was announced that ABC Holdings will be exiting some markets in Africa, and has since found a buyer in Access Bank, a diversified financial institution listed on the Nigerian Stock Exchange.
“We are delighted to welcome Access Bank to the local bourse. This transaction has reinvigorated the market as performance has been subdued due to the negative effects of the COVID-19 pandemic. Current and prospective investors of BancABC Botswana will be looking at this acquisition with great optimism as the Bank will look towards leveraging off Access Bank’s vast network and digital banking capabilities to springboard the Bank’s operations to new heights,” said Tsheole.
He said the transaction represents a great achievement for the BSE in being able to facilitate large trades in line with their current strategy to increase the average daily turnover levels to P18million per day by the end of 2021.
The single trade joins other previous trade records set by New African Properties (NAP) including P494.3 million that was recorded in 2016 and P484.6 million in 2017 as investors exchanged shares. The other record of P458.6 million in 2018 was registered when another NAP related company Furnmart delisted from the bourse.
The recent good news in addition to the resurgence in the BSE’s benchmark index will calm investors who been monitoring the decline in market capitalisation since 2015. The current momentum in share price gains has been on the back of solid profits from listed companies that are defying the economic headwinds.
The DCI fell by 11.3 percent in 2016, before recovering slightly in 2017 with a 5.8 percent loss but and continued to stumble over the years, with losses averaging 11 percent. In 2019, the DCI narrowed losses to 4.6 percent and while 2020 begun strongly for the BSE, it ended the challenging year with the index down by 8.2 percent.