Furnmart delisting costs BSE P394m


Botswana Stock Exchange Limited (BSEL) lost P394.19 million in market capitalization this week, approximately 0.9 percent of the BSE total domestic market capitalisation due to Furnmart’s exit after 20 years of listing.

The company, owned by the Maynhardt family, officially left the Botswana Stock Exchange, on the 20th of February after postponing the delisting twice before, priced at 65 thebe. Furnmart was valued at just under P400 million, the value of which was wiped off the BSE market capitalization. BSE’s market cap is made up of the total value of companies listed on the bourse. Any delisting hits on the BSE market value.

The market value of the BSE has been declining for the past five years, driven by the delisting of companies as well as the declining value of the listed ones.

Market capitalization refers to the total Pula market value of a company’s outstanding shares. Commonly referred to as “market cap,” it is calculated by multiplying a company’s shares outstanding by the current market price of one share. The investment community uses this figure to determine a company’s size, as opposed to using sales or total asset figures.

In 2014, domestic companies listed on the BSEL were valued at P46.209 billion, while the foreign companies listed valued at P371.9 billion. This brought the total market cap of the BSEL to P418.1 billion. The BSEL total market capitalisation would further shoot up to P421 billion in 2015, after the value of companies listed on the domestic board leapfrogged to P50.213 billion, while those on the foreign board totalled P370.8 billion.

Further BSEL’s market cap in 2016 remained flat as compared to 2015. It was valued at a total of P421.3 billion. Domestic companies were valued at P46.5 billion while the foreign companies stood at P374.3 billion. The year 2017, was unpleasant for the BSE. Total market cap declined to P418.1 billion, which was lower that the market cap recorded in 2014.

A major decline was recorded at the domestic companies, which saw their combined market value crumble by a staggering P2 billion to P44.4 billion. In 2014, three years back, the domestic companies had a combined market cap of over P46 billion.