Botswana Stock Market to List, State to Cede Control

(Bloomberg) -- The Botswana Stock Exchange plans to list its stock within two years and expects the government to cede control of the institution to private investors, Chief Executive Officer Thapelo Tsheole said.

The Gaborone-based exchange, which has 34 traded companies and 49 bonds, is currently about 80% owned by the state, with four brokers holding the rest, Tsheole said in an interview at the Bloomberg Emerging & Frontier Forum in London on Tuesday.

“We want a diverse shareholding, reducing government to far much less than 50%,” he said.

The listing would be a next step by the exchange, which demutualized last year, to improve its governance and transparency, Tsheole said. The move would also further the Botswana government’s aim of building a financial-services industry to lessen dependence on diamond mining and wildlife tourism.

The exchange, which was set up in 1989 and ran over-the-counter trading initially, is seeking to attract more international companies active in Botswana to trade their stock. It also wants to tap more of the about $8 billion of pension and private-sector funds available in Botswana, Tsheole said. Currently 70% of Botswana’s savings are invested externally, he said.

Listing Target

The exchange has a target of having 45 companies listed by 2021 and 50 bonds, he said. While it will likely achieve the bond target, getting to the company goal will be “tough,” he said.

Already tighter listings requirements, including boosting the free float to 30% from 20%, has led some companies to end trading in their stock and daily turnover fell to $700,000 a day this year from $1.3 million last year. Furniture Mart Ltd. has left the exchange and Wilderness Holdings Ltd., which runs lodges, is due to delist in July.

Flo-Tek, a supplier of pipes and irrigation products active in southern Africa, is exploring listing, Tsheole said.

The exchange is contemplating new products including global depository receipts, he said.

To contact the reporters on this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net;Mbongeni Mguni in Botswana at mmguni@bloomberg.net

To contact the editors responsible for this story: John McCorry at jmccorry@bloomberg.net, Paul Richardson, John Viljoen

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