Botswana Stock Exchange (BSE), which is weathering the recession by attracting quality companies on its main board, wants to see more listing of retailers as Cresta Marakanelo successfully listed on the local bourse to take to two the number of new entries in 2010 alone.
Herin Mendis, Chief Executive Officer of the local bourse, said on Monday that Cresta listing was a milestone as it is the largest IPO in the recent history of the market.
“We encourage more companies like Cresta to come to the BSE,” said Mendis. “We need to attract retail investors for this market to grow,” he added.
CrestaÔÇöthe hotel and tourism groupÔÇöwhich has a larger share of the market joined Wilderness Safaris as the big listings for the New Year.
It broke the Initial Public Offering (IPO) history looking at the amount of money netted and the subscription rate.
Normally, the IPO interests do not warrant extension, but its closing date was pushed forward to allow more retail investors to catch the boat.
When the initial public offer was closed, the company was 94 percent subscribed.
“It is the largest IPO we have. It is a key milestone to the BSE,” revealed Mendis.
“Even though it was not 100 percent subscribed, it managed to net P55.5 million. It is a record for BSE,” he said.
In Botswana, normally initial public offers close at 60 percent subscription rate and this shows education on asset classes is filtering through the ears of Batswana.
Cresta has the largest number of individual participation during the IPO, which makes it a milestone for the local exchange also.
Normally, monied institutions like investment houses or pension fund managers and insurance houses lead the pack in buying into companies before they start trading.
This could also be explained by the company’s presence in the market where it has over 700 beds.
Founded in 1974, Cresta initially BDC Hotel Management, has big names like Cresta Lodge, President Hotel, Botsalo Hotel, Bosele Hotel, Marang Gardens and Hotel, President Hotel, Riley’s Hotel, and Cresta Mowana Safari Lodge under its arm.
The listing of Cresta is a decision of Botswana Development Corporation (BDC), as part of Kenneth Matambo (now Finance Minister)’s desire to see the subsidiaries of government’s investment arm becoming public as part of citizen empowerment strategy.
BDC has been running Cresta network with TA Holdings of Zimbabwe (strategic partner) and after the listing, the share structure changes a bit.
BDC will now hold 27.35 percent, TA Holdings 40 percent, employees 2 percent, institutions at 10 percent while individual control 20.65 percent through the BSE.
Maria Nthebolan, Chairperson of Cresta, said at the listing that, as shareholders, the IPO subscription also surprised them.
“We are taking Cresta forward on the tourism front through the listing. The result (IPO) was more than what we expected as Cresta Marakanelo,” said Nthebolan, who is also the MD for BDC.
Cresta traded 352, 416 shares at 155 thebe, when the market opened 9.30 am on Monday.