The listing of government owned entities earmarked for privatization in the Botswana Stock Exchange, (BSE), is considered to be one of the feasible options. The ball has already been put in motion given the much anticipated listing of Botswana Telecommunications, (BTC). The biggest question that begs to be answered is which of the privatization options would be the best vehicle to drive government divesture.
Speaking to Gazette Business BSE Deputy Director, Thapelo Tsheole said BSE does not necessarily need to be the only option but it has been proven that the stock market is one of the best mechanisms to use. Tsheole said every Motswana will have the opportunity to participate at various levels of the market, suggesting that wealth will not be fast acquired by a selected few. He also said the market practices efficiency of pricing which therefore implies that national assets would as a result not be sold at undervalued prices and that the market also offers transparency of transactions which ensures that no investor will have undue advantage over other market participants. “Government should divest as much level as it possibly can because in our economy there’s a large pool of individual and pension money and other modes of savings that needs a lot of investment,” Tsheole said.
In a previous interview, Afena Capital Chief Investment Officer Alphonse Ndzinge said Botswana’s shallow market can only be deepened through increased investor activity, adding to that Tsheole said the market needs more instruments and companies listed in the stock exchange so as to increase participation. Tsheole explained that deepening the market would in the process empower ordinary Batswana because they too will now have a stake in the economy. He said that increased participation will improve the efficiency of the market in that money would now be able to actively circulate locally instead of being taken to outside markets, which is what is currently happening.
Despite BSE being sounded out as one of the best markets in Southern Africa, investment firms often complain about its shallow base in terms of the number of companies listed and the amount of instruments available. Tsheole in that regard said deepening the market would result in a much more diversified portfolio which would then give investment firms the ability to reduce the risk of instruments in that the instruments will now be traded in the Pula currency thus eliminating the currency exchange risk. He also said this would increase the risk/reward options available in the economy.
Tsheole is confident that widening opportunities for Batswana to participate in the financial sector will create and position Botswana as a financial hub.