An exclusive interview with the newly appointed Chief Executive of the BSE, Thapelo Tsheole
State the need to attract private companies to list on the BSE.
Tsheole: The BSE recognises the fact that the survival of a Stock Exchange is underpinned by its attractiveness towards not only investors, but also companies.
As such, the supply side of the market, being issuers of securities, has to be consistently nurtured. With this conference, the BSE is creating relationships with the private and unlisted companies and establishing a means of educating the present and future business owners about the value of utilising the BSE to pursue growth opportunities.
The reason we are doing this is to generate more listings over the short, medium to long term. Ultimately, increased listings make the BSE more vibrant and liquid and more attractive to investors and highly beneficial to listed companies.
What are the key things that the BSE looks at in a company to attract it or advise it to consider listing?
Tsheole. The universe of companies that can list on the BSE is broad; small, medium and large. It also includes business ideas – instances where an entrepreneur raises capital to finance an idea he has in a business proposal that investors find feasible, investible and deployable that they can buy into.
As such, our approach is all-inclusive and is not to look at companies that are already popular and are well established, we are also looking at very small and young companies.
State major benefits to a company when listed on the BSE
Tsheole. There are many benefits associated with a listing on the BSE. Major ones include;
Ability to raise capital: this is done at the IPO stage and subsequently through corporate actions such as rights issues and issues for cash.
Compared to a listed company, private unlisted companies do not have a broad shareholder base they can use to raise capital when required to. It helps improve the stature or profile of the company: Directors of listed companies are obliged to adhere to the highest level of accountability and corporate governance standards.
This is done to protect the interests of shareholders, particularly those that are not involved in the day-to-day management of the company. As such, a company that is listed on the Exchange is perceived to be well managed and duly accountable to shareholders.
It gives the company increased visibility: the BSE’s trading statistics is carried through international data vendors such as Bloomberg, and this helps companies to be readily accessed and be followed by international investors.
Kindly elaborate the relevance of the theme of the conference.
Tsheole.The theme of the conference is “Opening the BSE to the Business Community – Creating Value through Listing”.
Businesses exist for their owners or shareholders, and to maximise shareholder value by pursuing projects whose returns exceed the cost of undertaking such projects. The way the BSE fits in this value chain is that the BSE is a platform where companies can raise capital to fund expansion projects so as to grow and maximise shareholder value.
With this conference and pursuant to this conference, the BSE wants to create more awareness about this role it plays and to educate private businesses of all sizes that the stock exchange is not for companies that are large only, that the process of listing can be cost effective and that a listing opens up abundant opportunities by opening access to reasonable capital.
What is the BSE hoping to achieve from the upcoming conference?
Tsheole.We are using this conference as a platform where listed companies can share lessons and experiences with private unlisted companies about the value of listing and the manner in which they have utilised a listing to expand their products and services beyond Botswana.
We expect private companies to begin to introspect and to challenge their business aspirations and strategies and begin to look to the BSE to raise growth capital. The real life experiences that will be shared by CEOs of listed companies will help a great deal to educate business owners about benefits of listing on the BSE.
Businesses will possibly never look down on themselves and say “we are small and not big enough to list”. The conference will pave a way for the BSE to begin intimate conversations with private unlisted businesses through seminars so that we bring the information to their level and expose them to the expertise within the capital market and begin to handhold them through the process of listing as opportunities arise.
What range of private companies is BSE targeting: SMEs, Micro medium and why?
Tsheole.Small, medium and large enterprises, which we believe have the potential to list on the BSE in the near, medium to long term.
Share with us what necessitated the revision of BSE listings rules and other requirements
Tsheole. Markets and companies evolve as the environment changes and so does the regulation.
The BSE listings rules were amended primarily to update them. Secondly, they were revised for harmonisation purposes with listings requirements of other stock exchanges within SADC facilitated through the Committee of SADC Stock Exchanges. This is primarily aimed at promoting regional integration and facilitating surveillance across markets.
Thirdly, the revision gave us an opportunity to try and promote liquidity on the BSE by adjusting the public float to 30 percent in a staggered fashion to increase the number of shares that can be traded to the public.
In your views what is needed to be done for local businesses to flourish?
Tsheole.Already, Government is supportive of fostering private sector growth and is playing a meaningful role in terms of providing a conducive and enabling environment.
However, as a nation we need to collectively improve our economic competitiveness. We need to create, test and adopt new ways of doing business. We need to challenge our current business model of small, stable, family owned businesses that are maintained for subsistence.
We need to explore opportunities within our current customer base and also beyond our borders. Markets in Africa which were previously inaccessible are opening up, primarily because of improving economic fortunes and demographics, improving political stability and ongoing investments in infrastructure. These are opportunities we cannot ignore.
Through this conference, we want our private unlisted companies to appreciate and align themselves to benefit from his key advantage of listing on the BSE to access growth capital.