Tuesday, October 27, 2020

Listing is an effective platform for corporate growth strategies ÔÇô RMB

Rand Merchant Bank (RMB) Botswana, a division of FNB Botswana, says listing on the Botswana Stock Exchange (BSE) is a viable platform for companies across local industries to facilitate their operational growth. They also said it is pleased to see more local companies taking a heightened interest in considering listing as a means to assist their business expansion strategies. 

RMB Head Global Equity Capital Markets, Irshaad Paruk said the decision to list is a significant decision in any company’s evolution and can have several benefits including raising primary capital to support business growth and development. 

“Listing also raises a company’s profile, creates sustainability through corporate structure and governance, creates currency in the form of listed scrip to pursue potentially value accretive M&A, and facilitates the implementation of management incentives schemes to align interests of shareholders and managers,” he said.

He is of the view that the BSE is the third largest stock exchange in Southern Africa in terms of market capitalisation and is a tried and tested platform that has assisted local companies such as Choppies Enterprises and Letshego Holdings Limited to achieve phenomenal growth by supporting their expansion strategies across Africa. He added that the Botswana-born businesses are now major influencers at the helm of the development of Africa’s people and economies. He observed that their growth has undeniably brought with it substantial employment in the communities they operate in, alongside the provision of their respective solutions. 

 “Behind a successful offering and listing, goals to be achieved would normally include achieving an oversubscribed offering; an attractive valuation; a high-quality shareholder base; aftermarket liquidity; and full regulatory compliance,” he stated.

He further stated that according to the RMB Global Markets 2015/16 research report “Where to invest in Africa”, Botswana is the second best country in Africa in which to conduct business following Mauritius, having surpassed Rwanda, Ghana and South Africa. He added that Botswana provides a conducive environment for business and has a stable growth trend, making the BSE an attractive listing option. 

 “Listing is by no means only a matter of expanding a company’s shareholder spread. The results of listing, both financially and operationally, can be used to drive considerable change in communities and wider economies,” said Paruk.

He stated that since the BSE continues to contribute a significant proportion to Botswana’s Gross Domestic Product (GDP), its growth, especially from the increased listings of local companies and demand pushed by local participation, stands to in turn benefit Botswana’s economy and communities. 

“Through collective local participation we can reliably leverage off the local stock market to fund the development of Botswana’s industries – nationwide and beyond Botswana’s borders. The stock market, especially the BSE, is a developmental catalyst,” he said.

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Digital edition of The Telegraph, October 28, 2020.