Kopano Bolokwe is the Ag. CEO of the BSE, overseeing nearly P750 Billion in listed instruments. He has over 15 years’ capital markets experience tenured in Botswana, South Africa and United States of America, in asset management, investment brokerage and the stock exchange. He has over 8 years as an Executive with the BSE, leading the diversity of the Exchange in terms of products, issuers, liquidity, commercialization, regulatory reforms and elevating the BSE’s standing on the global financial stage.
He holds a Degree in Finance and a Masters of Business Administration from the University of Botswana. Mr. Bolokwe has completed the Registered Persons Exams (RPE) under the South African Institute of Financial Markets (SAIFM) and an Executive Development Program (EDP) at the Stellenbosch Business School. He is a charter holder of the Chartered Alternative Investment Analysts (CAIA) program and has completed level two of the Chartered Financial Analyst (CFA) program, both administered from the USA. He has graduated from the George Washington University School of Business, USA, with a Graduate Certificate in Capital Markets and subsequently undertaken graduate internship at MarketAxess Corporation in New York, USA, focusing on emerging and frontier debt markets as part of his training during the International Finance Corporation-Milken Institute Capital Markets Program, of which he is an alumnus.
Bolokwe is a Board Member of Okavango Diamond Company, a rough diamond marketing company that is wholly owned by the Government of Botswana.
In this Interview with Public Sector Global Magazine, Bolokwe, shares insights on the exchange’s proactive strategies to attract foreign investors. Highlighting the importance of a diverse investor base, he emphasizes the role of global associations, international roadshows, and improved market liquidity in positioning Botswana’s capital market as a vibrant, accessible destination for international capital. With a consistent foreign investor trading activity of 35-45%, the BSE is on a promising trajectory to strengthen its global standing., excerpts………
What is the role of BSE in Botswana’s finance sector?
So, we are at the center of Botswana’s economy to enable sustainable economic development. The BSE in particular is home to some or the majority of the top enterprises or companies in Botswana and across the region and the globe. We have thirty-two listed companies in total. And these are companies across more than 10 sectors of the economy. And the size of this company in total is just over three times the GDP of Botswana. Over all, the total size is nearly. 712 billion Pula. The BSE very formidable to exchange with in dollar terms, we are the third largest in Africa at 52 billion and the second largest in Southern Africa after the GSE, which is at about a 1.1 trillion US dollars. We are at 52 billion US dollars that compares to around 750 billion Pula. I would also like to break it down to say the stock exchange really exists to support livelihoods. Companies and government raise capital to be invested in ventures, in infrastructure, schools, healthcare system, security, that is things that drive employment creation. And this employment creation involves even our families back home. And with that employment creation that has been facilitated by the capital raiser, families are able to provide food for themselves, pay school fees for their children, buy clothes for themselves. To an extent that, when I speak to my team, I say, when you are busy working to list these instruments and these companies, see yourself at the end of the success story. So, we exist to support life.
Would you rate your service delivery as top notch?
Our service delivery is top notch. One of our orientation and values is to promote a high-performance culture. And doing that comes with a lot of dedication, developing people, a culture of harmony, collegiality, working together, collaboration. But also, it improves promoting market integrity. Because we are working in a space that is driven by trust, confidence and integrity , so service delivery has to be top notch. The BSE has evolved over time from being a government-owned to being a company limited by shares. In 2018, we undertook the process of demotionization to convert from an emotionally old entity to become a public company limited by shares. So, government is a shareholder, together with private individuals and also the members of staff. And that has compelled us to see ourselves differently and reflect that in how we do business and our culture and our fields. And I’m glad that the award we recently received as one of the Africa Top 50 Public Sector Agencies at the 2024 Africa Public Sector Conference & Awards is a testament to our service delivery . We also have a role and an obligation to our shareholders who are funding the business to make sure that we pursue commercial interests that create sustainable value for them. So, we have a commercial focus and that encompasses integrity, efficiency and sustainability.
How easy is it to invest in shares in Botswana?
The BSE is open to all. It’s not an exchange for the elites alone but for everyone. You can buy a minimum of one share. Our members and stock brokers who are representing the BSE that facilitate the buying and selling of shares don’t discriminate. Any amount of money you come with from any work of life, you would be assisted accordingly and with excellent service. So, on that note, it’s really easy. And we have been putting in place and efficient to trade shares, to clear shares, to settle shares and have them in custody by way of the automated trading system, which is an electronic trading platform on the trading site for trading shares
The financial markets can be unpredictable. How do you navigate market volatility?
Interestingly, volatility is unavoidable in capital markets, but volatility can be better and it can also be good, because what you want in capital markets is price discovery. So, in our regulatory framework we have put some mechanisms in place to deal with instances of volatility that we believe could be disruptive to the market. For example, if a share price falls by a certain amount then we have to halt trading and then investigate what could be happening in that share. Perhaps there’s a crash, perhaps there’s insider trading, somebody has information up front ahead of anyone else, and they’ve seen the opportunity either to sell or either to buy and they’ve moved the share price significantly higher or significantly lower, or perhaps there’s information that the company may need to disclose to the public so that it is uniformly accessed and it can then restore the order in the share price. So, we have those mechanisms of dealing with volatility within our control but also you know we like seeing volatility that comes from investor sentiments that helps to contribute towards price discovery.
What are some of the strategies you have implemented to ensure stability and investor confidence?
It’s a very good question. This is because financial markets thrive on trust and confidence. People need to be comfortable in their conduct as an operator of the store exchange. We are affiliated with a number of global bodies, some of whom are standard setters, with respect to financial markets policymaking. We are a full member of the World Federation of Exchanges, for example, and being a member of the World Federation of Exchanges means that we are seen to be align with best practices in running a stock exchange. In respect of our rules, our market infrastructure, risk management policies, in respect of the regulators, such as the Nambiq financial institutions, who regulate us. It gives investors’ confidence and comfort that we are operating a market that is robust, open, transparent, and upholds integrity, as well as protects the interests and especially the minority shareholders. And stability in the market is also very key. Our regulatory framework, being the listings requirements, are crafted through a process of consultation with the ultimate consumers. So, we develop them, we take them through the governance processes internally that end with the board. We consult, we get approved, we take them to NBFERA, they review them, and before we could implement them. That helps to make sure that when you do the rules, you’ve included as many perspectives as possible. So how you’re going to implement them becomes very predictable, becomes easy for people to comply. It minimizes instances of noncompliance and instability in how they will conduct their business and potentially disrupt the market.
Are you in any way incorporating ESG goals into your corporate strategy?
Yes, we are. Over the past years we’ve been doing a lot for the market in this particular area. So, we’ve created within our debt listing requirements, we had to add a chapter on sustainable bonds, which are green social sustainability and sustainability linked bonds. So that we provide guidance as to how entities could go about issuing green bonds, raising capital for renewable energy projects, waste management projects, a bit of affordable housing, and even finance and women businesses, which is a social orientation of sustainable bonds. And when we launched these rules, we said we need to make it competitive and attractive for these instruments to come to be listed. So, we introduced a fee incentive by way of a 25% discount, which has been very, very attractive to a few that have issued and that are preparing to issue. So last year in December, Absa was the first bank to issue the sustainable bond at a value of 47.4 million Pula. And they came again in February to issue up to 32.7 million Pula. I think we are now almost at 80 million Pula because of the interest that is now developing in our market for sustainable bonds. Our market has also evolved a bit to a point where they are able to create eligible assets. And some of this evolution also comes from government. We are benefiting from a partnership between the Committee of SADC Stock Exchange and FSD Africa regarding the Green Bond Program in SADC whereby FSD Africa is a technical partner, providing technical assistance and financial assistance to any company in any SADC Stock Exchange that is looking to raise capital. This is good because they help with identification of eligible assets which requires a lot of technical expertise, the formulation of the sustainable bond framework or the ESG strategy and identification of independent verifiers or second part opinion providers and they pay for them. It’s a very expensive service and then once we’ve issued, they also assist with post issuance reporting as well as paying for this. So, we’ve been exposing our ecosystem to this partnership so that they could benefit and we hope that they would leverage it. BSE has also just launched the new sustainability disclosure guidelines.
As a leader, what are some of the achievements you are most proud of?
I think, you know, firstly I must say I’m quite one-eyed and humbled that given the opportunity to lead the BSE in this transitionary period as an acting CEO. It was quite a competitive process. It took the best out of me and I think I competed and I remained hopeful for substantive appointment. That’s a personal achievement as far as my career development plans.
How would you describe your leadership style?
Predominantly I am a transformational leader, and this speaks to intellectual stimulation. I’ve come to a point where I’ve said to my people, we want to build a culture where we learn it all instead of coming across as knowing it all. I think it is through learning that we’ll continue to evolve and adopt best practices and actually deliver as per our vision, deliver as per our mission statements, as well as our values.
What are some of the values that have contributed to your career success?
uh… I come from a very humble background and my dad worked in the mines way back. I could say I’ve tasted what poverty feels like. It’s often unreal when I tell people that my vision growing up was to eradicate poverty. You know, I think that meant that I want to improve myself and my household in such a way that we move out of what constitutes poverty and then we never go back into that space. So, I think being hungry, storm-up from an early age, has really pushed me to see value in education and I’ve been able to excel at that because of being disciplined, being able to set long term visions and work towards them. And being competitive, but also being able to collaborate with the right people that could support my talents. I’m a firm believer that you really can’t fail in life.
Looking ahead, what are your priorities for BSE in the nearest future?
Yeah, I think, you know, first of all, because we’ve been able to do so much for the market and so far as sustainability is concerned, I want us now as an entity, as a business, as a company to be able to walk the talk. So, I want to formulate an ESG strategy that we can implement and showcase to the world the best practices we are doing in ESG. And then secondly, I want to embrace digital technology, particularly technology that could enable access to markets. And one of the things that we’ll be doing in the short term is to enable access or enable the buying of shares through the mobile phone, through laptops, what you call online or internet-based trading, but also electronic money such as Myzaka, Orange, Mani and Smega so that we could promote financial inclusion. And the third one is financial literacy, particularly through technology that speaks to young people. You’ve just launched the stock market simulator which helps secondary school competition so that we get the young people interested in shares and participating. And just yesterday we opened up to the public a way for competition where you and I and every member of public will be able to enroll in the simulator, try to buy shares, build a portfolio and the best performing portfolios will be awarded with share vouchers so that they then become immediately the actual investors in the stock market. And there are several other financial literacy programs that will be advancing, such as partnerships with tertiary schools, partnerships with Metshalo and societies and cooperatives, going to primary schools and also trying to lobby for the review of the school curriculum to include financial markets, capital markets, and then the stock market so that our students learn about these things from a very, very young age and they could change their fortunes forever. Our core mandate is to really list companies and enable access to investment opportunities and capital raising. So, there’s a lot that I’m doing in terms of attracting that we are doing in terms of attracting companies to list. And the next coming year, we want to see at least five companies being listed on the BSE and other structured products like ex-centred funds coming in larger numbers on the exchange as well as dead instruments but also expanding into new capabilities such as depository seats for which we have the regulatory framework. I really want to see the BSE becoming or being the top performing exchange in Africa not just by size but also by activity, the trading of shares, the liquidity and the innovative products and services that it offers.
What message would you have for young professionals?
If you work harder in the earlier years of your life, which are the transformative years of your life, particularly in the earlier years of your career, I think you’re setting yourself up for success. Because then you are building an armory of discipline, that you could always draw on when things become difficult and more challenges come to you as you progress with your career. And that’s something that I’ve been able to do. So, I say to young people that if you still find yourself knocking off at 5 p.m., know that you’re going to have a problem going forward in the next 5 or 10 years where you have to knock off at 1 a.m. You won’t be able to cope. So, get a lot of work in the early years of your career. Work hard, work long hours, but also study those programs that will set you apart and that are looking into niche markets, that are emerging and are likely to be the most favorable in terms of job security going forward. Such as data sciences, financial technologies, cyber security, regulation and compliance. They are niche programs within these broader ones that could set you apart and ensure sustainable job security, but also the potential to partner with businesses by providing products and solutions to them in the event that you’re not able to find traditional employment.
