Investing in Botswana: Reference Guide 2013

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The Botswana Share Market Domestic Company Index has quietly averaged 20% returns since its inception in 1989. Not bad for a desert nation of just over 2 million people. This year has been no exception with the index already up almost 15% in 2013. With a stable democracy, low corruption, and low restrictions for foreign investors, Botswana is a tantalizing market for frontier investors. The following guide will assist anyone looking to begin investing in Botswana.

Companies by Sector

There are 24 total companies listed on the Domestic Exchange. Out of those companies, four of them are relatively illiquid and have been excluded: they are Olympia Capital Corp, RDC Properties, RPC Data, and Imara Holdings.

The remaining 20 companies are mostly in the Financials (11 total) and Consumer Discretionary (5 total) sectors. Here is the list of companies broken down by sector and industry:

Stock Info: Market Performance

Here’s how they have done over the past year, as well as daily volume numbers to get a sense of liquidity. All numbers in local currency:

Financials make up some of the largest companies by market cap on the exchange. It is interesting to note that all but two of the companies issue dividends despite the healthy capital appreciation in most of the equities, with an average yield of 5.1% and one year return of 17.1%.

Valuation and Profitability Ratios

Here is a list of common ratios used to determine the value of a stock. Given the frontier nature of this exchange, not all data was available so some numbers are hard to come by. Numbers are from Bloomberg and if current data wasn’t available, the ratio for the previous fiscal year was used.

Leverage Ratios

Finally, we have our leverage and coverage ratios. Like before, data is spotty:

Conclusion

Even with the impressive run this year, we believe there are strong opportunities in the Botswana Domestic Share Market. We hope this data equips fellow frontier investors with the tools to make more informed decisions, and are happy to answer any questions you may have. Happy investing!

1 COMMENT

  1. […] This survey is a data mine.  Botswana differentiates itself as the only place in Sub-Saharan Africa (Algeria persistently ranks ahead of others) that has a culture of corporate governance, high quality government services, and a satisfied populace.  That bodes well for investment in Botswana.  Should you be interested, check our article here. […]

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