It was a mixed performance for the Botswana Stock Exchange (BSE) as the market readies to close for Christmas.
As of the period ended 12 December, 2014, the total turnover recorded in the year amounted to P2,106.6 million.
This is the second highest ever since the inception of the local bourse, according to BSE Deputy Chief Executive Officer, Thapelo Tsheole.
The performance review of the exchange shows P2, 175.7m was recorded in the same period in 2013. Tsheole said trading was largely accounted for by local companies with dominance in the 3 quarters of 2014.
“Foreign companies dominated in Quarter 2 and accounted for 52.7 percent of turnover. Contribution to turnover by local individuals improved significantly in Quarter 4 of 2014 reaching 7.4 percent of total turnover, although it remains below the level recorded in the same period in 2013,” he said.
The BSE made a slow start to the year as the Domestic Company Index (DCI) declined by 1.1 percent in Quarter 1, but gained ground in the subsequent quarters. The DCI appreciated by 2.0 percent, 3.3 percent and 0.7 percent in Quarter 2, Quarter 3 and Quarter 4 (period up to 12 December, 2014) respectively.
But comparatively, the market performed better in 2013 than this year. “On a year to date basis, the DCI appreciated by 5.0 percent in comparison to an appreciation of 18.4 percent in the same period in 2013,” Tsheole revealed.
On a year to date basis the DCI came top and outperformed the JSE ALSI, SEMDEX, and MSCI Emerging Markets Index with gains of 5.0 percent in Pula terms.
“In US Dollar terms, the DCI still outperformed the three indices as the impact of the Pula depreciation against the US Dollar was minimal on the DCI returns relative to the impact the US Dollar appreciation has had on the returns from the JSE and the SEM. During this period the Pula depreciated by 8.2% against the US Dollar.”
On the other hand, the Foreign Company Index (FCI) performance was mixed during the year. According to BSE, in Quarter 1 and Quarter 2, the FCI registered an increase of 0.1 percent and 0.2 percent respectively, and a decline of 0.5 percent in Quarter 3.
In Quarter 4 (period up to 12 December, 2014) the FCI lost 0.2 percent. On a year to date basis, the FCI declined by 0.3 percent up to 12 December 2014 in comparison to a depreciation of 0.1 percent in the same period in 2013.
It has been a mixed bag at the exchange in regard to primary market activities in equities as the tiny bourse was expected to close the year on a high note. However, as the market closes for Christmas, the Herin Mendis led outfit managed to nick in one and eluded by BTCL Initial Public Offering (IPO) that has been the talk of the toen.
Magnum Gas & Power Ltd, a coal bed methane and petroleum explorer with prospecting licenses in Botswana and coal seam gas tenements in New South Wales Australia, was listed on the BSE’s Foreign Venture Capital Board on 1 December, 2014. The company is primarily listed on the Australian Stock Exchange.
In both 2014 and 2013, there was only a single listing on the BSE by Magnum and Shumba Coal respectively. Only 1 company, Hana Mining, delisted in 2014, whereas 2 companies delisted in 2013, being Aviva Corporation and RPC Data, in September and December 2013 respectively.
On another note, the biggest listing news could have been Botswana Telecommunications Corporation Limited (BTCL) IPO that was never to be. The IPO that follows government’s privatisation drive has been moved to the New Year as the November 7th date failed to materialise. Government said a number of considerations have necessitated that the IPO, which was scheduled to be opened by the end of 2014, be extended into 2015.
“It was thus always an ambitious timeline to conclude before year-end, one that all in the Project nevertheless believed was achievable,” admitted Ministry of Transport and Communications officials.
The 49 percent shares at BTCL are expected to be listed on the BSE with the government retaining a 51 percent majority stake. Of this 49 percent, 5 percent will be reserved for staff as part of an Employee Share Ownership Plan (ESOP).
Government instruments that traded on the BSE are the debt papers that include 6 treasury bonds and other quasi and parastatals debt. The Bank of Botswana (BoB) held a total of four auctions of Government Notes in 2014 under the P15 billion note Programme.
According to Tsheole, in the first auction of the year, held in March, BoB auctioned P150 million of BW011, of which P149 million was allotted. The bond was 1.9 times oversubscribed indicating increased demand for long term paper given the supply at the time of the auction. In addition, a P340 million six month Treasury Bill was issued. The T-Bill was oversubscribed by 2.6 times and fully allotted.
On 6 June, an amount of P558 million was raised in an auction comprising a six month Treasury Bill (P340 million) and three bonds comprising of BW008 (P25 million), BW010 (P100 million) and BW011 (P93 million). All securities were oversubscribed. In the third auction in the year on 5 September, an amount of P427 million was raised in an auction comprising a six month Treasury Bill (P340 million), and BW011 bond (P87 million). The two securities were oversubscribed by 1.8 times and 1.6 times respectively.
BoB held the final auction of 2014 on 5 December, offering an additional P50 million and P150 million of the BW008 and BW011 bonds as well as a six month Treasury Bill (P340 million). The BW008 was fully allotted at an oversubscription rate of 1.5 times and only P142 million of the BW011 was allotted with the bond 2.2 times oversubscribed. The Treasury Bill was 1.5 times oversubscribed and the Bank allotted only P199 million of the P340 million on offer.