Tuesday, October 27, 2020

Local companies display appetite to list on the BSE

It was evident at the inaugural Botswana Stock Exchange (BSE) listings conference last week that the local bourse still has a lot of work to do to educate local companies about the importance of listing.

The conference was organized to educate local companies about the benefits of listing on the BSE. It was obvious from the questions asked that the bourse will have to work hard to demystify the process of listing as the local business community perceives it to be laced with ambiguity. However, the level of attendance and the questions that were asked indicated that there was interest from the business community. The audience comprised of government officials, captains of industry, industry regulators, listed companies and private unlisted companies.

Presentations and discussions ranged from understanding the role of the BSE as a source of capital, transition from a private to a public company, the regulatory framework related to listing as well as listing for start-up companies. According to BSE Chief Executive Officer (CEO) Thapelo Tsheole, between 2011 and 2015 companies listed on the bourse ranged from 32 to 37. The least number of listed companies was recorded in 2015 at 32 and the highest was in 2012 at 37. Out of the 32 companies currently listed in the bourse 22 are domestic; 12 of which are home brewed companies that have since grown to establish a regional presence.

Most of the companies that have established a footprint within the region are in the property, financial services, tourism and the retail sectors. Since establishment of the stock exchange in 1989 the number of listed companies has progressively increased from five at the time to the current 32. However, this growth has been significantly surpassed by the growing number of unlisted registered companies. During a discussion on start up financing, Anthony Siwawa of Venture Partners Botswana pointed out that there is a stark contrast between the number of companies listed on the bourse and the total number of companies incorporated by the Registrar of Companies and Intellectual Property (ROCIP). Siwawa highlighted that in 2014 the total number of registered companies was 14,800 out of which only 22 were listed on the bourse. 

“The wide difference presents a vast opportunity for the BSE to attract private companies and assist them in transitioning into public companies,” he said.

As part of the discussions, listed companies shared with the audience the experiences and lessons they learnt during transition from private to public companies. Such companies included Turnstar Holdings, Letshego Holdings, Choppies Enterprises and Sefalana Group, all of which have operations outside Botswana. Turnstar Holdings Managing Director, Gulaam Abdoola said the decision to list was motivated by the need to finance the property company’s flagship investment, Game City Mall.

Turnstar was first listed in the Venture Capital market, which is a platform within BSE designed for start-up ventures as it subjects them to less stringent requirements. It migrated to the main board after three years.

“Listing has been good to us as it availed funds that enable the company to expand its operations. However, the transition from a family owned entity to a corporate body was painful,” he said. With over 130 unlisted companies that had been invited, the conference comes at an opportune time in which the economy needs reinvigoration. Given the potential of small, medium and micro enterprises to infuse robustness on the economy, it can confidently be said that the conference came at the right time.

 

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Digital edition of The Telegraph, October 28, 2020.