Bond Market Perfomance Declines

Kabelo Adamson
BSE CEO: Tsheole

During the first quarter of the year, the bond market performance suffered a noticeable decline when compared with the same period in 2019.

According to the Botswana Stock Exchange Limited (BSEL) Market Performance Report, the value of bonds traded over the period was P162.5 million compared with P251.9 million recorded in the same period last year.

The recently released report shows that government bonds still completely dominate fixed income turnover, contributing P161.2 million while corporate bonds contributed just P1.3 million.

On 28 February, during government and treasury bills auction, Bank of Botswana (BoB), on behalf of government, offered additional tranches of the BW013 bond by P300 million, increasing the nominal amount in issue to P2.5 billion.

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The BoB also allotted an additional P400 million to the bond BW015, more than doubling the nominal amount in issue to P746 million.

During the first quarter of the year, RDC Properties, owners of the iconic Masa Sqaure Hotel, issued two bonds, RDCP002 valued at 40.15 million and RDCP003 at P12 million. The bonds were listed on 26 March.

On the back of government tap issuance and new insurances, the market capitalization of listed bonds subsequently increased to P18.3 billion compared to P15.4 billion as at the same period last year.

Government bonds account for P12.7 billion of the total amount whereas corporate bonds account for the remaining P5.6 billion.

Currently there are seven listed government bonds, the same number as in 2019 while the number of listed corporate bonds stands at 41, an increase from 31 registered during the same period last year.

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Meanwhile, the BSEL has seen its turnover drop significantly during the first quarter of the year.

By the end of March, which marked the first quarter of the year for the stock exchange, the BSEL had recorded a turnover of P185 million, which is almost half of what was recorded in the same period last year.

Indeed, it represents a drop of 46.6 percent from the P346.9 million recorded in the first quarter of 2019.

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The number of shares traded in the first three months of 2020 amounted to 81.7 shares compared to 156.1 shares traded in last year’s opening quarter.

Three companies, being Letshego Holdings Limited, Sechaba Limited and First National Bank Botswana (FNBB), were the top traded companies in terms of value.

The three of them accounted for 61.2 percent of total turnover compared to the 64.8 percent accounted for by the top three companies in the same period last year.

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