By Tebagano Ntshole
Gaborone — Botswana Stock Exchange (BSE) in collaboration with the Botswana Bond Market Association (BBMA) hosts the Bond Market Conference in October in a bid to support growth of the bond markets in the country.
Speaking at a press conference on Tuesday, BSE chief executive officer, Mr Thapelo Tsheole said the bond market was relatively illiquid but appreciated the fact that it had grown tremendously over the years.
He said at the end of 2015, the bond market accounted for 7.5 per cent of GDP, a modest improvement from 7.2 per cent in 2009. Mr Tsheole said the liquidity amounted to 8.5 per cent in 2015 compared to 5 per cent in 2009.
The total bond market capitalisation is close to a quarter, 24 per cent, of the total domestic equity market capitalisation.
He said the number of issued bonds had risen since the 1990's when there were only three bonds in comparison to 39 bonds listed on the BSE by 15 different issuers. Mr Tsheole said this year, they were expecting historic issuances. "All in all, we are better than we were about two decades ago, but we seriously recognise the need to address challenges that are slowing our growth and to do so as a collective," he said.
He said the BSE undertook a survey in 2010, among the bond market participants to try and understand the issues or structural impediments negatively affecting development of the bond market in Botswana.
"At the same time, we requested for recommendations that can address these structural impediments," he said.
Following the survey, they compiled the Botswana Bond Market Development Strategy.
Mr Tsheole said the BSE put together a Bond Market Steering Committee which comprised of the BSE and representatives from the market in 2011 to help the BSE drive the bond market development strategy.
"The committee was tasked with establishing the Botswana Bond Market Association and the Association was formally registered with the Registrar of Societies in September 2013," he said. He said the association has 24 corporate members and three individual members.
Mr Tsheole said the bonds were economically important hence they have chosen 'The Bond Market – A Pillar of the Economy' as the theme of the conference to be held October 6 at the Gaborone International Convention Centre (GICC).
He said the primary role of the conference was to bring together relevant stakeholders and participants in the bond market to engage in discussions on a wide range to topical issues covering the buildings blocks of a robust bond market.
Mr Tsheole said the African Development Bank (AfDB) has agreed to participate in the conference and said they considered them their strategic partner given their involvement in the development of local currency bond markets in Africa through their initiative called Africa Financial Markets Initiative (AFMI), which is under the African Domestic Bond Fund.