- BSE fully demutualized
- Profit expected from BSE Ltd
As of the 2nd August 2018, Botswana Stock Exchange has fully demutualized following its conversion from a mutual exchange to a company incorporated under and in terms of the Companies Act.
Addressing the media this week, Chief Executive Officer (CEO) Thapelo Tsheole said it was a historic milestone for Botswana Stock Exchange, one that will significantly energize the capital market in Botswana, and the continent at large.
Demutualization is a process of transforming from a member owned, not-for-profit, entity to a profit driven, investor-owned corporation which involves changing the legal status, structure and governance of an entity.
In the case of a stock exchange, it is the separation of the ownership of the exchange from the right to trade on the exchange. Pertaining to the BSE, the Proprietary Rights of the members of the then BSE, as well as the cash injection by Government of the Republic Botswana have been converted to shares in BSE Limited. The demutualization of the BSE began on 1st December 2015, when the BSE Transition Act, No. 2 of 2015 came into operation. The Main Committee comprising of broker representatives, Government as well as the Minister of Finance and Economic Development played a strategic role in the end to end process of demutualization, along with management.
Tsheole said the pace of stock exchange demutualization has been rapid in developed markets and slower in emerging ones. He stressed that this demonstrates the difficulty with which this process is accomplished given the diverse interests of the parties involved.
“On our part, the pace of demutualization has been exceptional and without hurdles, and BSE Limited now joins an elite league of stock exchanges as it is the seventh among twenty-eight stock exchanges in Africa to have undergone demutualization,” he announced.
He added that, “This demutualization and immediate corporatization of the Exchange brings forth enormous efficiencies that will enable the bourse to discharge its mandate and drive value for shareholders and stakeholders as we strive to become a world class securities exchange.”
Trading activity and liquidity at the domestic bourse was on the rise for the first half of 2018, with over P1billion garnered as turnover from the trade of shares, Botswana Stock Exchange (BSE) announced in its market performance for the 1st half (H1) of 2018.
As at 30 June 2018, the BSE had recorded a turnover of P1.08 billion from 411.6 million shares traded. During the same period in 2017, the BSE had registered a turnover of P903.8 million from a total volume of 291.4 Mn shares traded. This means that the value of shares traded increased by an impressive P181 million, while the number of shares traded during the same comparative period also increased by 120.2 million.
Further, in 2018, average daily turnover at the Thapelo Tsheole led exchange was P8.8 million, growing significantly from P7.3 million in 2017.