Tuesday, May 18, 2021

December is not an ideal month to start selling BTCL shares

For several months now citizen investors have been waiting with bated breath to claim a stake in the government owned telecommunications giant, Botswana Telecommunications Corporation Limited (BTCL). The Corporation was poised to become Botswana’s first ever public enterprise to be listed on the local bourse at least by early last year. Postponements after postponement have been the order of the day since then. A new date for the much anticipated listing has been set for mid this month, at least according to media reports which quoted communications minister Tshenolo Mabeo saying the opening period of the IPO will be no later than December 18th 2015.

At the same press conference, Mabeo cited the many mechanical steps that needed to be followed as reasons for the delay, saying there were a series of obligations and requirements that needed to be complied with, including the Botswana Stock Exchange’s listings requirements. He however committed to December 18 as the do-or-die-day. Will such deadline be met? Only time will tell.

In the meantime, while we wait, we could throw in one or two key questions. The first one is whether December is an ideal time to open the BTCL IPO. The fact of the matter is that at this time of the year, most ordinary Batswana, whom we believe deserve BTCL shares, or put differently, whom we have been told are the targeted investors, are looking forward to spending the Christmas holidays with their families. Their budgets are as such geared towards Christmas spending, nothing else.

On 5 December 2014, exactly 12 months ago, the government released a statement postponing this listing to early this year saying that the opening over the holiday break was not ideal. The reasoning as stated in that statement was that opening the IPO in December would not allow institutional investors enough time to conduct their own internal processes (convening investment committees, seeking board approvals and so forth). The question is, how different is December 2015 from December 2014?

Like the government rightfully said in December 2014, a deferred IPO opening will have the additional benefit of allowing more Batswana to continue to save to enable them to participate in what will be the most significant listing in the history of Botswana. Given the high income inequality in this country, there is high likely hood that by the time BTCL reaches the BSE shores on December 18 most of the ordinary folks of this country would have no single thebe to spare. The truth of the matter is that is due to low wages in this country, most locals tend to prefer spending their earnings on goods and services rather than investing, and around this time of the year (December) most of them either travel home or send the little they have managed to save to the dependants. We hear the IPO will be opened for a period of six weeks or so, but that still falls within the “critical” period of spending for our ordinary folks.

With all these in mind, it therefore tempts one to make a suggestion that there be one last postponement of the IPO. This should not be seen as a postponement but rather an added measure to ensure that the targeted investors are at least at a financial level that would allow them to participate in this historic undertaking.

Like we said before, although it is true that investors will never be ready for an IPO, particularly those who are not familiar with capital markets like most of our people, the #Bottomline remains that we need to do the listing at a period that is most convenient for our primary target.

The privitisation or rather listing agents could even use this holiday to reach all the individual citizens who still have limited understanding of an IPO as well as how one can participate and benefit from it. Put differently, a deferred IPO opening will aid Communications Ministry, PEEPA and their associates to extend the awareness campaign being undertaken for this IPO to ensure that a wide reaching and more informative education programme is delivered to our people. After all there is no rush as shown by the number of times that the process has been postponed. Oh by the way, the government should learn to avoid making premature commitment statements, this would help avoid any sort of embarrassment that comes with postponements such as this one.

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