BSE embarks on mitigating delisting surge
The prevailing economic and business situation will force the Botswana Stock Exchange (BSE), to work extra hard, and attract new listing on the bourse. Statistics indicate that initial public listings (IPOs) on stock exchanges across Africa has been low and BSE has not been spared in this quandary.
The low appetite to list has been punctuated by a flash of delisting on the continent, as observed in South Africa, one of the biggest economies. “The South African public market has experienced a streak of delistings, losing 27 companies in 2022 and JSE alone experiencing 25 delistings in 2022,” said BSE Chief Executive Officer, Thapelo Tsheole, citing the plunge in listings was first noticed in 2021, when 24 companies delisted from the JSE.
However, new listings have also gone down on the backdrop of the huge delisting. “Over the last five years, only 71 IPOs have been carried out in Africa. In 2021, only eight IPOs were completed in Africa, and only four IPOs in 2022,” said Tsheole, adding that returns in African markets were similarly dampened. “The projections about the global economy are casting shadows on the recovery of the world economy, dampening the hopes for IPOs in the short term,” he added.
Last year, former Permanent Secretary in the Ministry of Finance and Development Planning, Wilfred Mandlebe bemoaned perennial delisting of companies from the stock exchange, over the past years. “There has been a worrying trend of companies delisting, which is the opposite of what we need. I therefore expect the BSE to continue monitoring the situation with a view to ensuring that there is a balance between the costs and benefits of listing for companies on the local stock exchange,” said Mandlebe.
He however acknowledged that the local bourse – BSE, needs further attention to improve the functioning of the stock market. In addition, Mandlebe has implored BSE to improve market efficiency by reducing time taken to settle share transactions. Mandlebe says the government continues to review relevant pieces of legislation to promote the development of the stock exchange and provision of tax incentives to encourage companies to go public and investors to buy listed shares on the stock exchange.