Botswana Stock Exchange said the Automated Trading System (ATS) will make the local bourse more visible and create efficiencies in the trading methodology once implemented.
In its annual report for 2011, BSE said the implementation of ATS was progressing at a rapid rate and is expected to be implemented in Quarter 4 of 2012.
“Along with the implementation of the ATS, our CSD system is also being upgraded,” wrote Chairperson, Patrick O’ Flaherty.
“The ATS is a major development for us and compliments the already established CSD, which will propel the BSE to into the future,” Flaherty noted.
“The ATS will make us more visible and help create efficiencies in the trading methodology, which we expect will enhance liquidity,” he added.
BSE implemented the Central Securities Depository (CSD) in 2008 and since the introduction the systematic risk of investing in share market decreased.
However, the exchange observed that in order for the CSD to reach its potential, there is a need to engage investors and motivate them to dematerialise their shares.
“A central depository system can only reach its full potential in a 100 percent dematerialised environment,” said O’ Flaherty.
“This is the reason that in certain countries dematerialisation is mandated by law or directed to be carried out by the Capital Market Regulator,” he added.
However, the BSE said on its annual report that the dematerialisation of share is in the CSD is continuing at a satisfactory pace.
By the end of December, 2011, there were more than 12, 800 investor accounts open with 46 percent of all domestic company shares and 91 percent of all foreign company shares being dematerialised.
“The BSE also dematerialised its first corporate bond after obtaining approval from Registrar of Companies”.
O’ Flaherty added that this has been the experience of many other markets that have implemented the automated trading systems.
BSE Chief Executive Officer, Hiran Mendis revealed in the annual report that 2011 was ‘a special year’ as the local bourse operated at a profit even if the subvention from government is completely discounted.
Mendis said from a consolidated point of view, the exchange’s dependence on the subventions was limited to P0.3 million in the year under review compared to P1.3 million in 2010 and P2.4 million in 2009.
The CEO added there were reasons for the good performance by the stock exchange mainly because of new listings and improvement in daily turnover.
The BSE average daily turnover increased from P3.9 million to P4.1 million, which had a positive impact on the commission income.
The income from the listing fees and sustaining fees increased by 52 percent due to 10 new BSE listings in 2011 and because listing fees were revised last year after a lapse of 10 years.
The BSE capitalisation for equities rose by 16.9 percent in 2011 compared to the prior year. The domestic market capitalisation for equity was P30. 7 billion at the end of last year, compared to P26.2 billion in 2010, the annual report noted.
The increase was due to the cumulative impact of a price effect of a positive 8.7 percent and a quantity effect of 8.3 percent
The BSE domestic market capitalisation relative to the GDP was 25.5 percent as at the end of 2011 in comparison 25.9 percent and 36.6 percent in 2010 and 2009 respectively.
The domestic market capitalisation as a percentage of non mining GDP remained largely unchanged at 37. 6 percent in 2011 from 37.7 percent in 2010.
In comparison to other markets, the BSE outperformed the JSE, SEM and MSCI Emerging Market Index.
The BSE’s DCI appreciated by 8.7 percent during 2011 in comparison to the depreciation of 0.4 percent and 4.0 percent in JSE ALSI and the Stock Exchange of Mauritius (SEM) Index, respectively.