BSE’s Domestic Company Index continues downward trajectory in 2018

The Domestic Company Index (DCI) continued its downward trajectory in 2018. During the year-to-end-of-March, the DCI depreciated by 3.1% compared to a 1.9% decrease realised during the same period in 2017. On the other hand, the Foreign Company Index (FCI) registered a marginal depreciation of 0.05% in Quarter 1 of 2018 relative to a decrease of 0.2% over the same period in 2017.

BSE continues to market itself

With effect from 1 January 2018, the BSE introduced the Domestic Company Index Total Returns (DCI-TR) following Main Committee and NBFIRA approvals in December 2017. As at 31st March 2018, the DCI-TR had depreciated by 1.9%, reflecting the cushioning effect of dividends on the weakening of prices over the quarter.

As at 31 March 2018, the BSE had recorded a turnover of P236.2 Mn from a volume 100.7 Mn shares traded. During the same period in 2017, the BSE had registered a turnover of P532.8 Mn and a total volume of 173.9 Mn shares traded.

Performance of Exchange Traded Funds (ETFs)

During Quarter 1 of 2018, the ETFs market was less active compared to Quarter 1 of 2017. The volume of ETF units traded was 451,868 in 2018 while the turnover registered was P41.4 Mn. Over the same period in 2017, the number of units traded amounted to 3.1 Mn yielding a turnover of P122.9 Mn.

Investor contribution to turnover

The contribution by local companies amounted to 57.6% in Q1 2018 from 62.2% in Q1 2017. Local individual investors contributed 5.7% to turnover in Q1 2018 at relative to 4.8% during Q1 2017.

As can be seen in Figure 7 above, the DCI and JSE ALSI were the only indices under review that realized negative returns in domestic currency during the Quarter 1 of 2018, contracting by 3.1% and 6.8% respectively. On the other hand, the SEMDEX and MSCI EM appreciated by 3.9% and 1.1% on a year-todate basis respectively. It can be noted that the BSE and JSE ALSI also benefited from the 3.6% and 4.5% appreciation of the Pula and Rand against the US Dollar. In US Dollar terms the DCI appreciated by 0.4% while the JSE ALSI’s contraction improved to 2.4%. Inversely, the Mauritian Rupee depreciated by 0.1% against the US Dollar leading to a 3.8% appreciation of the SEMDEX in US Dollar terms.

Bond market performance

Activity in the bond market had decreased in 2018 (period to 31 March 2018) compared to the same period in 2017. The value of bonds traded over the period was P27.4 Mn in comparison to P91.2 Mn traded over the same period in 2017.

Bank of Botswana (BoB), on behalf of Government, held its first bond auction of 2018 on 2 March offering additional tranches of the BW007 (P77 Mn allotted), BW008 (P100 Mn allotted), BW011 (P100 Mn allotted), BW013 (not allotted) bonds and a Treasury Bill (P220 Mn allotted). The BSE has registered 1 bond listing so far, being the BW013 bond which was issued at the 1 December 2017 auction and listed on the BSE on 24 January 2018. Thus, there are 44 listed bonds compared to 42 bonds as at 31 March 2017. On the back of Government bonds tap issuances and new issuance, the market capitalisation of listed bonds increased to P14.8 Bn compared to P11.9 Bn as at the same period in 2017.