- BSE chief underscores need for FDI
- Outlines stock exchange role in FDI attraction
Tsheole was speaking at the launch of the Rand Merchant Bank’s (RMB) report titled “Where to Invest in Africa 2021” in Gaborone recently. He called on the business community and Botswana’s stakeholders in development to adopt robust measures to ensure that the country attracts investors and broadens its economic base.
The launch of the RMB report was used to mark the official February Opening Bell Ceremony and Tsheole took the opportunity to explain the role of the BSE in economic development that entails cultivating the ground for investment. “This report, as demonstrated in prior years, is one of the most important, detailed documents that highlights the top investment destinations across various sectors on the continent,” he said, adding that the BSE takes a keen interest in the RMB report in line with its efforts to attract FDI in the form of investors and issuers to the local capital market.
The stock exchange, he said, is the epicentre of capital markets and therefore should create a conducive environment for ease of doing business in Botswana and facilitate the process of raising capital in Botswana. Through such efforts, Tsheole added, the BSE has been able to attract a wide and diverse issuer base by promoting the listings value proposition to local and international business communities.
The BSE’s efforts to promote investments include creating awareness on capital markets and its role in FDI generation, hosting the Annual BSE Listings & Investment Conference, one-on-one company engagements, development of educational material for dissemination, facilitation of educational radio shows, the BSE Tshipidi Mentorship Programme, and annual Listings Refresher Workshops.
He noted that in its efforts to draw the attention of international markets to Botswana, the BSE has devised strategic partnerships with leading international financial markets and business reporting giants like Bloomberg and CNBC Africa. As a result, Tsheole added, the media campaign has generated interest from a number of brands as prospective investors.
Tsheole said it is important that at a macro-level, there is creation of a conducive environment for companies to do business in Botswana. “The underlying benefits of such forms of investment are unlimited in nature as we work towards increasing productivity, creating jobs, developing infrastructure, promoting innovation, fostering skills transfer and introducing technological advancements that can contribute towards the growth of Botswana’s economy,” he noted. Addressing himself specifically to the RMB report, Tsheole said there is a plethora of advantages that come with investing in Botswana as an ideal investment destination in Africa.
He noted that Botswana has no exchange controls. “(This) means that there are no restrictions on the inflow and outflow of capital/currency in the country, hence prospective issuers can raise capital on the BSE and expand their operations to the rest of the continent or the world,” he said. He identified Botswana’s strong macro-economic fundamentals that affect positive economic growth as the second advantage of investing in the country. “Monetary policy in Botswana has an increasing focus on the goal of price stability and a framework for forecasting inflation, which has been stable overtime,” he said.
Another advantage that Tsheole noted is that Botswana has an abundance of capital that stems from capital by pension funds seeking for assets to invest in. “The majority of the funds are invested in offshore assets while the rest is invested in Botswana companies primarily listed on the stock exchange,” he said. “This allocation supports the notion that there is a lot of capital chasing too few assets, which reinforces the advantage of raising capital in Botswana through the BSE.”
To underline his point, Tsheole said currently the BSE plays host to many companies doing business in Botswana, Africa and the world at large. “These companies represent a spectrum of industries such as commerce, agriculture, banking, financial services, wholesaling and retailing, tourism, property, security services, energy, mining, and telecommunications,” he noted.
Further, he noted 11 of the 30 companies listed on the BSE have a regional and international presence. Because of its viability, the BSE-listed companies contribute 40 percent of the national GDP. “Our main goal is to contribute significantly to Botswana’s economy by promoting a robust private sector by acting as a catalyst for companies to access equity or debt-finance that will ultimately lead to the growth of these companies for the overall benefit of our economy,” he said, reiterating the BSE commitment to economic diversification.
Briefly sharing market data, Tsheole stated that as at 5 January to 4 February 2022, the stock exchange recorded a market turnover of P117.5 million and an average Daily Turnover of P5.1 million. “The foreign investor contribution to equity turnover thus far in 2022 amounts to 17.9 percent,” he said. “This comprises Foreign Companies’ contribution of 17.1 percent or P19.5 million in monetary terms and Foreign Individuals’ contribution of 0.8 percent or P0.9 million in monetary terms.”
Speaking at the same event, an economist with RMB, David Kavishe, noted that Botswana ranks fifth on the list African countries to invest in. Launching the RMB 2022 report, Kavishe said RMB researchers considered factors like fiscal sustainability, healthcare, tourism, transport and trade when arriving at the ratings.