What sugar is to tea is what New African Properties (NAP) is to the Botswana Stock Exchange (BSE); it certainly has been the sweetener to the local bourse and not once but twice.
NAP started from a consolidation of the property interests of the Cash Bazaar Holdings (CBH) Group and some of its partners into a single fund. Information contained in Imara Capital Securities report states that the CBH group is an established multi-national corporation with interests in the property, clothing retail, furniture retail, supplies manufacture and tourism industries.
Last week the BSE experienced a ramp up of shares that changed hands resulting in the highest turnover in a single day at P484.6 million, being the first in 2017 but the second highest turnover ever recorded in the history of the BSE, after the recorded turnover of P494.3 million in June, 2016.
The bushwhacker of both records is NAP which in turn puts the bourse in top charts. According to Head of Market Development at BSE Thapelo Moribame, the second record was attributable to “an investor who was selling part of their shareholding in NAP, and the investors who were buying.”
It is not surprising that NAP was behind this given that investors had probably been eyeballing the stock since its pioneering surge of shares that changed hands in a single day in 2016. The record reflects a benefit to both investors and the local capital market.
“This is a positive development for the market as it will increase the liquidity of the counter since the number of investors has increased as a result of the disinvestment,” Moribame said.
She added that it also encouraged entrepreneurs to consider listing in the bourse as the benefit of doing so is clearly demonstrated as it can be seen that one can build wealth and eventually realise the value they have created through the market.
Indeed the recorded turnover is a momentous feat especially when comparing it to the daily average turnover in the bourse. Moribame cited the average daily turnover at P10.7 million per day so far in 2017. In 2013 the average daily turnover amounted to P9.3 million per day, in 2015 it increased to P12.2 million per day and this year it amounts to P10.7 million per day, she said.
From this it can be observed that 2015 recorded the highest average daily turnover. It is worth mentioning that 2015 is three years after the bourse introduced the Electronic Trading System (ATS), a system that Moribame said allows for real-time matching of orders for listed securities leading to greater efficiencies. She adds that following its implementation the bourse saw an improvement in turnover, thus making it one of the most important infrastructure investments that BSE has made.
“Consequently, turnover surpassed the P1.0 billion mark for the first time in 2013 realising a turnover of P2.3 billion, up from P894.7 million in 2012. Since then, the BSE went on to reach greater heights by realising a record highest turnover of P3.0 billion generated from 803.1 million shares traded in 2015. In 2016, the BSE achieved a turnover of P2.5 billion,” she said.
Thapelo Tsheole, Chief Executive Officer (CEO) at BSE was quoted saying in a statement that the record turnover is in line with their 2017ÔÇô2021 BSE strategy to grow the market and increase the average daily turnover levels to P18.0 million per day by 2021.
NAP listed in the stock exchange in September 2011 at a list price of P2.00. At close of business on Friday last week the stock’s closing price was P3.21. The report by Imara Capital securities though compiled a few years ago had stated that “due to its good reputation in the industry, the group continuously gets approaches from property owners for joint venture property development projects.” It makes sense that today a disinvestment results in investors rushing in to get a piece of the action.
The report did state that its weakness is that it is skewed towards retail, which according to NAP the group has a 99 percent retail portfolio, primarily in Botswana. The portfolio includes Riverwalk Shopping Centre, Kagiso Centre and Kasane Mall to mention but a few.