Corporate Profile

Mission,Vision & Core Values01

MissionTo drive sustainable economic growth by providing a gateway for raising capital and accessing investment opportunities.

VisionTo be a world class securities exchange delivering innovative products and services.

Core Values• Innovation • Integrity • Sustainability• Efficiency• Commercial focus • Teamwork

The mandate of the BSE is to provide and operate a fair, transparent and efficient stock market for all stakeholders in order to optimise national economic empowerment. The BSE is a parastatal under the Ministry of Finance and Economic Development (MFED) and is regulated by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA).

The Exchange regulates the securities market in Botswana, which comprises of shares, bonds and Exchange Traded Funds (ETFs) at present.

Over and above the three (3) investment products listed the BSE has the regulatory framework and capacity to accommodate the listing of Investment Funds, Commercial Paper and Global Depository Receipts, among others.

Introduction

The Botswana Stock Exchange (BSE) is Botswana’s national stock exchange given the responsibility to operate and regulate the securities market in Botswana.

Regulatory FrameworkThe BSE is regulated by Non-Bank Financial Institutions Regulatory Authority (NBFIRA) as a securities exchange. Unlike some Exchanges, the BSE is not a Self-Regulating Organisation (SRO). As such, the BSE promulgates its own rules and in turn submits these to NBFIRA for approval.

Moreover, the Central Securities Depository Botswana (CSDB) which is managed by the BSE is mandated by Bank of Botswana (BoB) to operate a clearing settlement system in accordance with the provisions enshrined in the National Clearance and Settlement Systems Act (No. 5 of 2003). The central bank regulates funds settlement processes whereas NBFIRA is responsible for the securities market processes.

02

BSE ProductsAt present, the instruments that are listed on the BSE are shares, bonds and exchange traded funds (ETFs).

Boards Domestic Companies

Foreign Companies

Total

Main Board 22 4 26

Venture Capital Board 2 6 7

Total 24 10 34

OTC Board No companies yet.

Economic Sector No. Of Listed Equities

Financial Services & Insurance 6

Retail & Wholesaling 5

Property 6

Banking 3

Security Services 1

Tourism 3

Energy 1

Telecommunications 1

Mining & Material 8

34Total

BSE Equity Market Profile

EquityThe BSE’s equity boards had a cumulative Market Capitalisation of BWP’424.2 billion (approximately USD40 billion) as at December, 2016.

BSE EquityBoards

03

The BSE has 6 Government of Botswana (GoB) bonds and 35 Corporate Bonds. However, the GoB bonds account for 67% of the total BWP’11.6 billion

(approximately USD’1 billion) market nominal amounts in issue and much of the liquidity.

Bonds

Boards 201420132012

Government Bonds

Liquidity (BWP’Million)

323.5

Corporate Bonds -

Total 323.5

314.2 94.7

18.0 -

332.2 94.7

Market Capitalisation (BWP’Billion)

Government Bonds 6.5

Corporate Bonds 3.3

Total 9.9

5.3 6.0

3.2 3.2

8.5 9.3

Number of Bonds Listed

Government Bonds 6

Corporate Bonds 31

Total 37

6 6

29 30

35 36

6GoB Bonds

35Corporate Bonds

2015 2016

858.0 446.7

- 37.2

858.0 483.9

7.6 8.3

2.5 3.9

10.1 12.2

6 6

32 35

38 41

04

Notably, the BSE listed the first Exchange Traded Fund (ETF) in Africa outside of South Africa – NewGold – in July 2010.

Following this feat the Exchange went on to list 3 other ETFs: CoreShares Equally Weighted Top 40 ETF, NewPlat ETF and NewFunds.

ETFs

201420132012 2015 2016

NewGold ETF

Turnover (BWP’Million)

5.9 30.0 137.6

CoreShares ETF 170.3 427.7 0.6

New Plat ETF** 26.5 61.9

27.6 131.2

38.9 8.0

95.7

NewFunds ILBI ETF*** - -

Total 202.7 519.6 233.966.5 139.2

Analysis of the ETF Market Performance

05

In 2008, the BSE introduced the Central Securities Deposi-tory (CSD) system and established the Central Securities Depository Botswa-na (CSDB). The CSD has facilitated the dematerializa-tion of shares, bonds and ETFs and has improved the safety of these assets.

It must be noted that the CSDB is running below capacity and potential hence there is scope to diversify its revenue sources and offerings. The CSDB complies with the principles of the International Organization of Securities Commission (IOSCO).

According to Thomas Murray, the category of “Asset Safety Risk” is defined as 'the risk that assets held in custody at the CSDB may be lost or misappropriated, either due to a default or an omission, misuse, or breakdown of controls (legal, operational or others)'.

In the last assessment by Thomas Murray on 12th May 2016, the dematerialization status was 90.5%.

Market Infrastructure and Technology

As a result of achieving 100% dematerialization the CSDB has been given a rating of BBB with a positive impact by Thomas Murray Data Services. Further, the CSDB has been rated A+ with a positive risk impact with respect to “Asset Safety Risk”.

In 2012, the BSE commis-sioned the Automated Trading System (ATS) to replace the manual trading of securities.

The ATS is integrated with the CSD system to ensure efficient clearing and settlement of trades.

The implementation of the CSD and ATS projects along with other market development initiatives led to increased trading activity on the BSE.

The average daily turnover increased from BWP’3.6 million a day in 2012 to BWP’9.3 million a day in 2013.

The trading levels have continued in their upward trajectory increasing to BWP’12.2 million in 2015 and we have managed to sustain those high levels of trading activity.

06

BSE Market Statistics

2012 2013 2014 2015 2016

Volume of shares Traded (Million)

409.9 710.5 591.6 803.1 778.2

Value of Shares Traded (BWP’Million)

894.7 2,315.4 2,177.4 3,032.4 2,541.2

Total Market Capitalisation (BWP’Million)

412,349.0 416,590.4 418,156.7 421,099.2 421,313.19

Domestic Market Cap (BWP’Million)

35,530.8 43,457.6 46,209.9 50,213.9 46,571.96

Average Domestic Market Cap (BWP’Million)

35,530.8 39,494.2 44,833.7 48,211.9 48,572.01

Average GDP (BWP’Million)

107,668.2 117,493.2 129,552.7 146,345.4 157,409.4

Mkt Cap/GDP (%) 33.0 33.6 34.6 32.9 30.9

Turnover/Mkt Cap (%) 2.5 5.9 4.9 6.3 5.5

Price to Book Value (%) 2.5 2.7 2.8 2.2 1.8

P/E Ratios (times) 9.2 11.4 11.0 12.3 13.37

Dividend yield (%) 4.3 4.1 4.3 4.0 4.4

Number of Trading Days

247 248 247 248 249

Average Daily T/O (BWP’Million)

3.6 9.3 8.8 12.2 10.2

Average Daily Volume (Million)

1.7 2.9 2.4 3.2 3.1

07

Strategic Alliances

In line with its strategic intent to position itself as a regional financial hub and become the leading stock exchange in Africa, the BSE has forged strategic alliances with regional and international bodies.

ASEA & CoSSE

The BSE is a member of the African Securities Exchanges Association (ASEA) and the Committee of SADC Stock Exchanges (CoSSE).

April 2016

BSE joins the Sustainable Stock Exchange (SSE) initiative of the United Nations and admitted as a partner exchange of the SSE

June 2016

BSE was admitted as an Affilate Exchange of the world Federation of Exchanges (WFE).

CSD Affilations

The Central Securities Depository Botswana (CSDB), a 100% subsidiary of the BSE responsible for clearing and settlement of securities listed and traded on the BSE, is a member of the Africa Middle East Depository Association (AMEDA) and the World Federation of CSDs (WFC).In November 2016, the BSE also signed the Marrakech Pledge on sustainability issues.

Botswana’s comparative and competitive advantage hinges on the following;

• Highest sovereign credit rating in Africa

• Stable currency

• Liberalized Market

• No exchange controls

• Enforceable property rights

• Strong capital/Excess savings

• Rule of Law and political stability

• Geographical location within the SADC regions

• Trade agreements in place

08

Corporate Social Responsibility09

Corporate Social Investment is important to the BSE, not only do we want to be known as a dynamic company with a wide range of financial products, but we want to have a meaningful impact on the community that we serve.

Naturally we implement initiatives that are complementary to the values of the BSE and promote the socio economic situation of Batswana in areas of education, entrepreneurship, community development, health and environmental/ sustainability issues.

BSE Brokers10

BSE licensed brokers are:

Broker: Telephone: Email:

Imara Capital Securities 3188886 enquiriesbots@imara.com

Motswedi Securities 3188627 motswedi@motswedi.co.bw

Stockbrokers Botswana 3957900 info@sbb.bw

African Alliance Securities Botswana 3188958 info@africanalliance.bw

Botswana Stock Exchange Plot 64511, Fairgrounds

Private Bag 00417 GaboroneTel: +267 3674400

Fax: +267 3180175Website: www.bse.co.bw

Email: info@bse.co.bwFeedback Email: Feedback@bse.co.bw

Facebook: Botswana Stock ExchangeTwitter: @TheOfficialBSE

LinkedIn: Botswana Stock ExchangeYoutube: Botswana Stock Exchange

Contacts