Botswana Guardian Business Editor, KOOBONYE RAMOKOPELWA interviews the Botswana Stock exchange Limited CEO, Thapelo Tsheole as he exudes confidence while chronicling the success story the local bourse has become.
BOTSWANA GUARDIAN: What strategies will be employed to encourage both domestic and foreign companies to list on the BSE this year?
THAPELO TSHEOLE: The first point of engagement is to engage both domestic and foreign issuers and understand their business needs that can be addressed by listing. As the BSE, we utilise our various platforms to communicate the benefits and process of listing. Further, we use market and business intelligence to scout for companies to list.
GUARDIAN: Are there specific industries or sectors that the BSE aims to attract for listing or investment? If so, what is attracting the bourse to these sectors?
TSHEOLE: The BSE is a multi-sectoral platform where we list companies from across different sectors, our role is to provide capital needs for growth and expansion purposes and we are not sector specific.
GUARDIAN: What investments are planned to enhance the technological infrastructure of the exchange?
TSHEOLE: The Exchange has invested in world class technology for trading and settlement such as the recently introduced Central Securities Depository System (CSDS) which has various functionalities such as the Retail Investor Module that avails client’s access to their personal accounts to view information. We also upgraded our trading systems. In 2024, we will introduce a stock market simulator to educate prospective investors about trading in the stock market.
GUARDIAN: What measures will be implemented to ensure the resilience and reliability of the exchange's trading platforms?
TSHEOLE: The trading and settlement platforms that the exchange uses are world class and at this point there is no need to put measures in place. These systems put us at par with some of the big exchanges globally.
GUARDIAN: How does the BSE ensure compliance with regulatory requirements and international standards?
TSHEOLE: The BSE adheres to laws, regulations, standards, and other rules set forth. It is an important aspect of doing business especially in a financial sector. The BSE is governed and regulated through various laws and statutory bodies that include the Companies Act, the Securities Act and the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). The BSE is an Affiliate of the World Federation of Exchanges (WFE), a Partner Exchange of United Nations-backed Sustainable Stock Exchanges (SSE) initiative, a member of the African Securities Exchanges Association (ASEA) – and currently holds the Presidency of ASEA, a member and Secretariat of the Committee of SADC Stock Exchanges (CoSSE) for which it holds the Chairmanship. The BSE is a member of the Association of National Numbering Agencies (ANNA) and a Recognized Stock Exchange under the UK’s Her Majesty Revenue and Customs (HMRC).
GUARDIAN: Are there any regulatory changes or updates expected in the near future that may impact the operations of the exchange?
TSHEOLE: Regulatory changes are a normal occurrence in any market, therefore changes across various spheres are expected at any time. As a regulator, sometimes we are at the forefront of those changes.
GUARDIAN: What steps will be taken to enhance transparency and governance within the exchange?
TSHEOLE: The BSE Group is dedicated to the implementation of effective structures, policies and practices that enhance corporate governance and create sustainable value for its shareholders and stakeholders. As a capital markets regulator, the BSE Group strives to achieve and uphold the highest principles of business ethics, corporate governance and reporting. In fulfilling this, the BSE Group developed a corporate governance framework in line with the Companies Act, Botswana Accountancy Oversight Authority (BAOA) Guidelines, NBFIRA Draft Corporate Governance Guidelines and King IV Code of Corporate Governance (King IV). The corporate governance framework will be gradually implemented over a 5-year period as the Group transitions into its 2022-2026 corporate strategy. The BSE is committed to continually reviewing and improving its corporate governance processes by benchmarking against international best practices.
GUARDIAN: What initiatives will be launched to educate investors and promote awareness of the BSE and its listed companies?
TSHEOLE: The BSE uses various platforms to communicate its mandate and products. In 2024, the BSE will launch a stock market simulator to educate prospective investors about trading in the stock market. Last year we entered into a strategic partnership with the Chartered Institute of Securities and Investment, based in UK, to offer their educational programmes locally in order to improve the market standards and professionalism among market participants.
GUARDIAN: How can the BSE foster greater participation from retail investors and encourage long-term investment strategies?
TSHEOLE: We are introducing a Retail Investor Module to allow investors to access their investment portfolios and statements remotely, and this has mandated that we stop sending paper CSD statements as we had done since 2008. We are also looking into the prospects of developing an internet-based trading platform and a mobile trading app, as well introducing direct market access to increase market reach and the accessibility of the market by brokers. Education remains a key thing, to help demystify investing, and deepen the knowledge about existing investment products and opportunities. This we do through our various platforms such as social media, webinars, workshops and participation in various forums.
GUARDIAN: Are there plans to collaborate with educational institutions, government agencies, and industry associations to promote financial literacy and investment culture?
TSHEOLE: Yes, as elaborated above. But also, we conduct guest lecturing in tertiary institutions, we do in-house presentations at various organisations by invitation, we also receive the members of the public and the working community for presentations and capacity building at our offices. We can point out Botswana Defence Force as one institution that is adequately exploiting this opportunity.
GUARDIAN: What measures will be implemented to enhance market liquidity and depth?
TSHEOLE: We have introduced market-making and we continue to encourage participants to take up this opportunity. We have lowered our trading fees, and the listings fees for products such as commercial paper and sustainable bonds.
GUARDIAN: Are there initiatives to improve market-making activities and enhance price discovery mechanisms?
TSHEOLE: As indicated above, we continue to showcase the prospects and importance of market-making to potential participants and issuers.
GUARDIAN: What role is BSE playing to promote sustainability and ESG principles among listed companies?
TSHEOLE: We are among the leaders in the continent in so far as sustainability and ESG is concerned. First, we are a Partner Exchange of the UN-backed Sustainable Stock Exchanges Initiative which seeks to promote sustainable investing in capital markets and we benefit in many ways from being a member of this network, the recent benefit being the training on applying the IFRS Sustainability Disclosure Standards. We are at the tail end of availing a new ESG Disclosure Guidance for listed companies, much more improved and encompassing of all the developments around the sustainability standards globally.
Last year we implemented fee incentives for listing sustainable bonds, by way of a 25% discount on initial and annual sustaining fees, a feat that helped to raise Botswana’s ranking from number 8 to number 6 in 2023 in the Absa Africa Financial Markets Index Pursuant to that, in December 2023, we listed the first ever sustainable bond on the BSE, issued by Absa and this put us among the few countries in Africa to have listed sustainable bonds. There is a lot of capacity we carry out, mainly on the back of the partnership between COSSE and FSD Africa under the SADC Green Bond Programme and this extends to market participants across the SADC region.
GUARDIAN: How can the BSE foster greater participation from retail investors and encourage long-term investment strategies?
TSHEOLE: The BSE will continue to introduce new products and provide education to the various segments of the market, mostly continue to provide information on the stock market on the various platforms.
GUARDIAN: How will the BSE strengthen its relationships with other exchanges, financial institutions, and regulatory bodies regionally and globally?
TSHEOLE: The BSE already works closely with other exchanges through the members highlighted, this makes it easy to share information across various markets and learn best practice.
GUARDIAN: Are there opportunities for cross-listings, joint ventures, or strategic alliances with international exchanges?
TSHEOLE: Definitely, the opportunities are there and they have been explored fully through the various initiatives we have implemented jointly with partners.
GUARDIAN: What steps will be taken to enhance the visibility and attractiveness of the BSE to foreign investors?
TSHEOLE: The BSE has a diverse investor base of both domestic and international investors and it is a clear indication of our efforts in the local and international markets. The exchange will continue to participate in platforms that enhance visibility in the international market.
THAPELO TSHEOLE: The first point of engagement is to engage both domestic and foreign issuers and understand their business needs that can be addressed by listing. As the BSE, we utilise our various platforms to communicate the benefits and process of listing. Further, we use market and business intelligence to scout for companies to list.
GUARDIAN: Are there specific industries or sectors that the BSE aims to attract for listing or investment? If so, what is attracting the bourse to these sectors?
TSHEOLE: The BSE is a multi-sectoral platform where we list companies from across different sectors, our role is to provide capital needs for growth and expansion purposes and we are not sector specific.
GUARDIAN: What investments are planned to enhance the technological infrastructure of the exchange?
TSHEOLE: The Exchange has invested in world class technology for trading and settlement such as the recently introduced Central Securities Depository System (CSDS) which has various functionalities such as the Retail Investor Module that avails client’s access to their personal accounts to view information. We also upgraded our trading systems. In 2024, we will introduce a stock market simulator to educate prospective investors about trading in the stock market.
GUARDIAN: What measures will be implemented to ensure the resilience and reliability of the exchange's trading platforms?
TSHEOLE: The trading and settlement platforms that the exchange uses are world class and at this point there is no need to put measures in place. These systems put us at par with some of the big exchanges globally.
GUARDIAN: How does the BSE ensure compliance with regulatory requirements and international standards?
TSHEOLE: The BSE adheres to laws, regulations, standards, and other rules set forth. It is an important aspect of doing business especially in a financial sector. The BSE is governed and regulated through various laws and statutory bodies that include the Companies Act, the Securities Act and the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). The BSE is an Affiliate of the World Federation of Exchanges (WFE), a Partner Exchange of United Nations-backed Sustainable Stock Exchanges (SSE) initiative, a member of the African Securities Exchanges Association (ASEA) – and currently holds the Presidency of ASEA, a member and Secretariat of the Committee of SADC Stock Exchanges (CoSSE) for which it holds the Chairmanship. The BSE is a member of the Association of National Numbering Agencies (ANNA) and a Recognized Stock Exchange under the UK’s Her Majesty Revenue and Customs (HMRC).
GUARDIAN: Are there any regulatory changes or updates expected in the near future that may impact the operations of the exchange?
TSHEOLE: Regulatory changes are a normal occurrence in any market, therefore changes across various spheres are expected at any time. As a regulator, sometimes we are at the forefront of those changes.
GUARDIAN: What steps will be taken to enhance transparency and governance within the exchange?
TSHEOLE: The BSE Group is dedicated to the implementation of effective structures, policies and practices that enhance corporate governance and create sustainable value for its shareholders and stakeholders. As a capital markets regulator, the BSE Group strives to achieve and uphold the highest principles of business ethics, corporate governance and reporting. In fulfilling this, the BSE Group developed a corporate governance framework in line with the Companies Act, Botswana Accountancy Oversight Authority (BAOA) Guidelines, NBFIRA Draft Corporate Governance Guidelines and King IV Code of Corporate Governance (King IV). The corporate governance framework will be gradually implemented over a 5-year period as the Group transitions into its 2022-2026 corporate strategy. The BSE is committed to continually reviewing and improving its corporate governance processes by benchmarking against international best practices.
GUARDIAN: What initiatives will be launched to educate investors and promote awareness of the BSE and its listed companies?
TSHEOLE: The BSE uses various platforms to communicate its mandate and products. In 2024, the BSE will launch a stock market simulator to educate prospective investors about trading in the stock market. Last year we entered into a strategic partnership with the Chartered Institute of Securities and Investment, based in UK, to offer their educational programmes locally in order to improve the market standards and professionalism among market participants.
GUARDIAN: How can the BSE foster greater participation from retail investors and encourage long-term investment strategies?
TSHEOLE: We are introducing a Retail Investor Module to allow investors to access their investment portfolios and statements remotely, and this has mandated that we stop sending paper CSD statements as we had done since 2008. We are also looking into the prospects of developing an internet-based trading platform and a mobile trading app, as well introducing direct market access to increase market reach and the accessibility of the market by brokers. Education remains a key thing, to help demystify investing, and deepen the knowledge about existing investment products and opportunities. This we do through our various platforms such as social media, webinars, workshops and participation in various forums.
GUARDIAN: Are there plans to collaborate with educational institutions, government agencies, and industry associations to promote financial literacy and investment culture?
TSHEOLE: Yes, as elaborated above. But also, we conduct guest lecturing in tertiary institutions, we do in-house presentations at various organisations by invitation, we also receive the members of the public and the working community for presentations and capacity building at our offices. We can point out Botswana Defence Force as one institution that is adequately exploiting this opportunity.
GUARDIAN: What measures will be implemented to enhance market liquidity and depth?
TSHEOLE: We have introduced market-making and we continue to encourage participants to take up this opportunity. We have lowered our trading fees, and the listings fees for products such as commercial paper and sustainable bonds.
GUARDIAN: Are there initiatives to improve market-making activities and enhance price discovery mechanisms?
TSHEOLE: As indicated above, we continue to showcase the prospects and importance of market-making to potential participants and issuers.
GUARDIAN: What role is BSE playing to promote sustainability and ESG principles among listed companies?
TSHEOLE: We are among the leaders in the continent in so far as sustainability and ESG is concerned. First, we are a Partner Exchange of the UN-backed Sustainable Stock Exchanges Initiative which seeks to promote sustainable investing in capital markets and we benefit in many ways from being a member of this network, the recent benefit being the training on applying the IFRS Sustainability Disclosure Standards. We are at the tail end of availing a new ESG Disclosure Guidance for listed companies, much more improved and encompassing of all the developments around the sustainability standards globally.
Last year we implemented fee incentives for listing sustainable bonds, by way of a 25% discount on initial and annual sustaining fees, a feat that helped to raise Botswana’s ranking from number 8 to number 6 in 2023 in the Absa Africa Financial Markets Index Pursuant to that, in December 2023, we listed the first ever sustainable bond on the BSE, issued by Absa and this put us among the few countries in Africa to have listed sustainable bonds. There is a lot of capacity we carry out, mainly on the back of the partnership between COSSE and FSD Africa under the SADC Green Bond Programme and this extends to market participants across the SADC region.
GUARDIAN: How can the BSE foster greater participation from retail investors and encourage long-term investment strategies?
TSHEOLE: The BSE will continue to introduce new products and provide education to the various segments of the market, mostly continue to provide information on the stock market on the various platforms.
GUARDIAN: How will the BSE strengthen its relationships with other exchanges, financial institutions, and regulatory bodies regionally and globally?
TSHEOLE: The BSE already works closely with other exchanges through the members highlighted, this makes it easy to share information across various markets and learn best practice.
GUARDIAN: Are there opportunities for cross-listings, joint ventures, or strategic alliances with international exchanges?
TSHEOLE: Definitely, the opportunities are there and they have been explored fully through the various initiatives we have implemented jointly with partners.
GUARDIAN: What steps will be taken to enhance the visibility and attractiveness of the BSE to foreign investors?
TSHEOLE: The BSE has a diverse investor base of both domestic and international investors and it is a clear indication of our efforts in the local and international markets. The exchange will continue to participate in platforms that enhance visibility in the international market.
