Tuesday, May 30, 2023

World Economic Recession took a toll on the Botswana Stock Exchange -CEO

The World economic recession, which started in the last quarter of 2008, had a huge impact on the performance of the Botswana Stock Exchange (BSE), says its chief executive officer, Hiran Mendis.

In an interview with The Sunday Standard on Thursday, Mendis said as a result of the recession which caught up with the Botswana markets around October 2008 the performance of the Domestic Company Index (DCI) showed a depreciation by 8.3% in the first quarter of 2009 and went on to fall again by 3.4% in the second quarter.

Signs of recovery were registered in the third quarter with an appreciation of 10.8% and closing the year at 4.9%. Overall, the DCI achieved a performance of only 2.9% over the last year.

The FCI was down 2% in the first quarter and 4.3% in Q2 but turned around in October by registering a gain of 3.2% and closing the year at 23%. The FCI registered a 19% appreciation over the last year.

“In terms of liquidity the BSE registered a P3.1 million per day as compared to P4.8 million per day in 2008,” said Mendis.

He was optimistic that the year ahead was going to be a lot better than 2009 although the bourse was up to a slow start.

“Traditionally, January is slow month; you can’t read anything in terms of future performance. We expect more listings and broadening the instruments on the exchange,” he said, without giving expected listings as he said that would be speculative.

The BSE has, with effect from January 1, 2010 introduced three new indices, which are the Domestic Free Float Index (DCFFI), Local Asset Status Free Float Index (LASFFI) and the Domestic Financial Services Free Float Index (DFSFFI).

“These are indices that are liquidity related; they are rated on liquidity as compared to market capitalisation,” he explained in brief.

He added that there was more consciousness on the part of citizens in terms of participation on the exchange as judged by the status now but he said they were narrowing down to individuals as opposed to pension funds and other collective investment avenues that the greater majority had a stake in.

“The strategy for 2010 is to have broad-based instruments on the exchange and we are very soon going to introduce exchange traded funds. We continue educating Batswana on the importance of investing via the stock exchange,” Mendis outlined.


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