Wednesday, May 22, 2024

BSE to shore-up Botswana’s bond market

The Botswana Stock Exchange (BSE), is to embark on a raft of measures that will shore-up the fledgling bond market in the country, a top official told Botswana Bond Market conference in Gaborone.


“We have announced tax incentives for people who want to issue and list sustainable bonds,” BSE’s chief executive officer Thapelo Tsheole said, adding that other measures aimed at having carbon credits will be in place from next year.


The incentives will be extended to the listing of commercial papers which is also at infancy stage.


BSE is planning to roll-out a swathe bonds in the future that will include — green bonds, inflation linked bonds, social bonds, and  sustainability bonds and sustainability linked bonds– in an attempt to broaden the product offerings in the bond market.


Government is expected to issue a P 3 billion long-dated and inflation linked bonds early next year.


BSE’s listed bonds  stand at princely P 26 billion out of the  a total programme memorandum of P 62.9 billion, meaning that there is still a scope to list a further P 37 billion. The move comes at a time when BSE is trying to shore-up its financial
market position both in Africa and international markets.


According to Absa Financial Market Index 2023 report it is hovering at number six position out of the 28 countries that are covered by the index. It jumped from eighth position in 2022 to 6th this year.  The index covers six areas namely; Market depth, Access to foreign exchange, market transparency, capacity of local investor, macroeconomic environment and legal standard an enforceability.


It decried Botswana on legal standards and enforceability. It is one of the three African exchanges that trades its securities through the London Stock Exchange and is recognised by the UK tax regime.


Others are Africa’s giant the Johannesburg Stock Exchange (JSE) and Stock Exchange of Mauritius (SEM).


It is also working African Exchange Linkage Project which will ultimately involve seven stock exchange in over 16 countries. The move coincides with the repatriation of some of the pension funds that are off-shore to prop-up the local economy. The repatriation will
start at the end of December this year.

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