How to Invest on the Botswana Stock Exchange

As one of Africa’s most politically stable and economically successful countries, Botswana provides an excellent place for investors to make their first foray into the continent.

The country was my first Sub-Saharan investment destination, and the experience was so positive that it prompted me to explore other African exchanges.

My broker patiently walked me through the process of buying shares, provided some helpful research, and, perhaps most importantly, instilled a sense of confidence that my transactions would be handled professionally.

Opening a Botswanan Brokerage Account

Here’s what to expect when opening an account and buying your first shares.

I maintain an account with Stockbrokers Botswana and have found them to be responsive to questions from small, retail investors. This article describes the process of opening an account and trading through them.

Photo by Columbus GV Team


Motswedi Securities, Capital Securities, and African Alliance also trade on the exchange, and the process of opening an account with them would be much the same. At press time, however, I had not received responses to my account opening queries from any of them.

Step 1: Complete and Return the Trading Account Application Form

The trading account application form requires that you disclose your passport or driver’s license number, your address, and banking details. It’s a pretty straight-forward form that you can complete, scan, and email back to the broker.

Step 2: Complete and Return the CSD Securities Account Opening Form

The Botswana Stock Exchange dematerialized all stock share certificates in 2009 and set up a Central Securities Depository (CSD) that records the ownership of securities in electronic accounts. This dramatically improved trading efficiency. The only drawback is that it added one additional form for new investors to complete. Complete the CSD Securities Account Opening Form and return it to your broker. You will then be assigned a CSD account number. This number will accompany every trade order you place, allowing the CSD to keep record of all your holdings in the country.

Step 3: Provide Two Certified Copies of Your Passport

One copy of your passport will be kept on file by your broker. The other will go to the CSD.

Step 4. Wire Funds to Your Brokerage Account

After opening your trading account, Stockbrokers Botswana will provide you with its bank details so that you can fund your account. The most efficient way to do this is via wire transfer. If you haven’t sent an international wire before, I suggest that you take your broker’s bank details to your local bank branch and ask them to walk you through the process. They’ll make sure that your funds arrive securely. Note that most US banks charge about $25 for outgoing international wires.

Step 5. Submit a Trade Order

You’ve done your research and found a stock among the Botswana Stock Exchange’s 23 domestic listings that you’d like to buy. What now?

If you have opened an account with Stockbrokers Botswana, you need only complete, scan, and email a Trading Mandate Form to their trading department.

Keep in mind that many listings on the Botswana Stock Exchange are nearly as illiquid as the Kalahari itself, so I advise specifying a limit price for all of your orders. This will help you avoid paying significantly more for your shares than you had intended to pay.

Your broker will then execute your trade and send you a contract note that specifies the buy or sell price, commissions, and fees.

Speaking of commissions and fees, here’s how much it will cost you to buy and sell stock on the Botswana Stock Exchange through Stockbrokers Botswana:

Transaction Value* Buying Selling
BWP1.00 – BWP50,000.00 (≈ US$6,700) 2.07% + BWP16.80 2.07% + BWP11.20
BWP50,001.00 – BWP100,000.00 (≈ US$13,400) 1.68% + BWP16.80 1.68% + BWP11.20
BWP100,001.00 – BWP500,000 (≈ US$67,000) 1.40% + BWP16.80 1.40% + BWP11.20

*Trades must be executed in lots of at least 100 shares.

Note that, like Zimbabwe, Botswana levies a 15% withholding tax on dividends. This is deducted by the issuing company before the dividend payment is made.

Investors can request that dividend payments be deposited directly into their trading accounts, thus avoiding the hassle of opening a local bank account.

Mission Accomplished

That’s it! Follow these steps and you’re a Botswana investor.

The process of opening a foreign brokerage account can be confusing. If you found this walk-thru to be clear as mud, please don’t be shy. Post your questions in the comments, and I’ll do my best to get answers for them.

Further Reading

- How to Invest on the Zimbabwean Stock Exchange

- How to Invest on the Nairobi Stock Exchange

Comments

  1. ontiretse says:

    my intention is to invest by buying shares and my main problem is how to start and how it works,how much per share?

  2. Hi,

    Wish to learn how much interest is earned in shares? And how to way my risks while investing in shares.

    Regards,
    Sally

  3. Reginald says:
    • Hi Reginald,
      That’s a good question. It’s a difficult one to answer, but at the end of 2010, there were roughly 10,500 stock trading accounts in Botswana and 48,000 in Ghana.
      The barriers to investing in either country are quite low as most brokers don’t require an account opening minimum, so stock trading should only increase in popularity.

    • major makgasa says:

      Firstly, thanks a lot for this info.

      My question is, what do you look at when choosing a company to invest in? Sales, volume, or what?

  4. Brian Munjoma says:

    l am in zimbabwe and invest on the ZSE and would like to extend my portfolio to the Botswana Stock Exchange,how can l access the company profile Book,and where can l subscribe trading closing prices.

    • I have opened an account with a stockbroker. What should I do now? I want to buy shares in one of the listed companies. Please help.

  5. Motshidisi Kebaalole says:

    To invest do I need to be carrying a lump sum of cash and can I do it online not necessarily having to go to Gaborone? Assume I have P800, can I invest it? Moreover is there a way of investing kind of paying the money in monthly installments of around P800 monthly for a year. Please help. I want to invest.

    • Hi Motshidisi,

      You don’t need to travel to Botswana to invest. You can open an account online through a broker like Stockbrokers Botswana. I believe they will open an account for you for BWP800. Their minimum trade amount however is 100 shares. So, if you plan to invest with them immediately, you will need to purchase a stock with a share price of less than P8.00 per share.

      Adding a set amount (like P800 every month) is a good strategy. The problem is that it might become expensive wiring money to Gaborone. If you know a cheap way to do this, then that’s great. But it wouldn’t be wise to spend $40/month to wire P800 to Botswana each month. You’d be better off saving up $2000 and then wiring it to Bots.

      All the best to you!
      Ryan

  6. Assuming I have shares in a particular company and want to sell part of my shares to buy stock or get cash, what exactly am i supposed to do?

    • Hi Kago,

      You will need to open a trading account with one of the brokers listed in the article. They will assist you with executing trades and disbursing your cash. If you purchased the shares long ago, you may be required to “de-materialize” the share certificates, because shares are now held electronically. The broker will walk you through the process of doing this.

      Happy investing!
      Ryan

  7. segopotso angel makuku says:

    Hi, I’m a Botswana citizen living in London. Is it possible to buy shares while I’m here?

  8. I’m very much interested in investing in the offshore market. Can you please assist with that?

  9. Tebatso O maotwe says:

    I have just developed this interest in buying shares, and I would like some clarification on this issue. Please help.

    • Do you have a specific question, Tebatso? If so, feel free to ask here, and we’ll do our best to help. Otherwise, I suggest contacting one of the brokers listed above to clarify the investment process.

  10. Hi. Is it possible for me to buy shares without using a stock broker?

  11. Dennis kokome says:

    Hi!
    How do I invest in international stock such as in Europe, USA and China while in Botswana?

  12. Mpho Selebogo says:

    Is it possible to buy shares if you are a tertiary student?

    • Hi Mpho, There is not an age requirement to invest on the Botswana Stock Exchange. So, if you have a brokerage account, you may buy and sell shares.

      • mpho selebogo says:

        Is it possible to buy shares at any time of the year? What is the minimum price of shares that a person can get?

        • Hi, Mpho. Yes, it is possible to buy shares throughout the year. In theory, the lowest possible value of a share is 1 thebe. Brokers require their clients to purchase in lots not less than 100 shares. Therefore, the lowest minimum purchase is 100 shares x 1 thebe = 1 pula. In practice, however, most shares are priced above 1 pula per share, so the minimum trade value is typically well over P100.

  13. mpho selebogo says:

    so one does not have to wait for shares to be released in order to buy?

    • That’s correct, Mpho. Shares trade hands constantly. Unless they are participating in an IPO, investors buy shares from other investors who wish to sell them. Therefore, there are typically always shares available to buy, because there is almost always someone who is willing to sell.

  14. Mpho selebogo says:

    So how many Choppies and or FNB shares can one buy with let’s say 2000 pula?

    • First, you will need to see the latest price sheet. You can find that at this link: http://www.bse.co.bw/market_n_statistics/daily.pdf. Now, look at the column titled “Last”. This shows the most recent price that all stocks traded at.

      As of December 5, the most recent price for Choppies was 203 thebe. Therefore, you can purchase roughly 985 shares of Choppies with P2000. (P2000 / 2.03 = 985.22)

      FNB last traded at 279 thebe. So, P2000 can buy you approximately 717 shares. (P2000 / P2.79 = 716.8)

      Note, however, that share prices are fluid. They can go up or down from day to day. Be aware, too, that your broker will charge a commission for each trade. So this will slightly reduce the number of shares a P2000 investment can purchase by about 2%.

  15. Where can you get the historical price for Botswana shares? I want to do some analysis before I invest.

    • Hi Sam,
      Bloomberg (www.bloomberg.com) has price charts for Botswanan stocks that stretch back five years. Just type the name of the stock you are analyzing into the search bar, then go to “stock chart,” and hover over the chart to view the price on a particular date.

  16. Ryan

    I have already opened an account with one of the local brokers. I’m stuck at trying to find information about the domestic companies. Before I buy shares of say LETSHEGO OR FNBB, where can i get their quarterly results? Something similar to what Yahoo! Finance provides with regards to financial news and company results. Especially, yearly SALES, EPS, EQUITY, CASH, GROWTH RATES, LOG TERM DEBT,P/E etc.

    Thank you in advance.

    • Hey One,

      You can find quarterly results for Botswana here. Unfortunately, the data isn’t in an easily digestible format, like it is on Yahoo Finance. I would suggest contacting your broker to see if they publish research that includes the info that you’re looking for.

      Good luck!

  17. I have opened an account with a stockbroker, and now I want to know what to do so that I can buy shares in one of the companies listed. Help, please.

    • Congratulations on opening an account, Mogi! Now, if you know which stock you’d like to buy, the next step is as simple as telling your broker which stock you’d like to buy and how much money you are prepared to invest. Investing does involve risk, so make sure to only invest money that you will not need for several years. If you have any interest-bearing debts to pay, I’d advise paying them off first before investing in the stock market.

  18. Hi, I found a job as a finance manager at a company based in Gaborone. he company has idle funds in the bank account. It gave me the task to find ways of investing these funds on the Botswana Stock Exchange and which securities it can invest in. The current management does not understand how the BSE works nor which companies are listed on the exchange. I want to know the procedures for investing in a listed company.

  19. Remofilwe Bafaletse says:

    Hi! I am trying to open an account with Stockbrokers Botswana Ltd. What is the difference between bonds and equities and which one would you recommend to someone who is new in the investment industry?

  20. Hi, I also want to invest at the BSE. The problem is I don’t understand the process.

  21. Wayne Mantswe says:

    Where can I learn how to trade stocks if I want to make it a business?

    • Hi Wayne,

      I don’t recommend day-trading (trading stocks frequently during the course of a day) as a livelihood. It’s extremely stressful, and based very much on luck as far as I can tell. If you would like to learn to analyze stocks professionally, I highly recommend the curriculum offered by the CFA Institute http://www.cfainstitute.org.

  22. Hi Ryan

    I currently stay in Wales, and I have been thinking of investing some of my pocket change by buying shares in Botswana. The stockbrokers’ website however does not offer much information on how I can get started. Any advice? And do you think a £100 is a good start off amount or should I put more?

    Kary

    • Hi Kary,

      I would try emailing Stockbrokers Botswana (www.stockbrokers-botswana.com) and asking them for instructions as to how to open a trading account. The process should be pretty straightforward.

      I would, however, count on investing a larger sum. Wire transfer fees, which will be required in order to fund your account, can be costly. They are charged at a flat sum and might even equal 10 pounds per transfer. So, it’s better to save up 1000 pounds or so before you start.

      Ryan

  23. Albert Sekoanelo says:

    hello..
    Am very much interested in buying shares and I would like to know how much can i use Purchase shares that represent 1% or 0.5% of a company that trade at e.g. P2.70 per share.how much dividends in estimates can I get quartely for shares of P2000 and P5000 respectively?

    • Hi Albert,

      Dividend yields vary from stock to stock. But it’s not unusual to find stocks with 4% yields in Botswana. If you bought P5000 worth of shares in one of these companies, your dividend would be about P200 per year. Dividends in most of Africa are usually paid on an annual or semi-annual basis – not quarterly.

      Hope this helps!
      Ryan

  24. Itumeleng says:

    Hi Ryan,

    Is the P200 per year standard or depends on the stock value at the end of a FY? This is not motivating at all for a starter like me. Investing that much money to get a dividend worth a restaurant meal? I’m looking at investing as well and wondering if you have any recommendations of where one can find some terms/language used in the stock market.

    Itumeleng

    • Hi Itumeleng,

      The P200 was just an example. It may be higher or lower depending on the stock, its performance, and how large an investment you make. Basically, you can think of dividends as a portion of earnings that a company pays to investors as a sort of reward for investing in the company.

      Also, note, that companies tend to raise their dividends at a rate that reflects the growth in a company’s profits. And as a company’s profits increase, its share price tends to increase, too.

      Here’s a great introduction to stock investing. (It’s written for US investors, but its main concepts are applicable to Botswana, too.)

      http://www.fool.com/how-to-invest/thirteen-steps/index.aspx

      You might also find this article helpful.

      http://investinginafrica.net/2013/02/what-is-a-stock/

      Hope this helps a little bit, and let me know if you have any questions!

      • Itumeleng says:

        Hi Ryan,

        Thank you so much for your response and continued commitment in helping novice starters like me. Keep up the good work with your blog, I found a lot of information useful just on this thread.

        Thanks a million,

        Itumeleng

  25. Thulani Vundhla says:

    I have $5000.00, and I want to buy some shares. I understand I’ve got to open the account with a broker in order to start buying shares. My question is how many shares roughly can I get from them for that precise amount of money?

    • Hi Thulani,

      The short answer to your question is that it depends on the price of the share that you want to buy.

      Here’s how you go about figuring out roughly how many shares you can afford.

      When you wire your money to your brokerage account, the $5000 will be automatically converted to Pula. Note that any costs of the wire transfer will be deducted from the $5000. Let’s assume for simplicity that the wire costs $50.00.

      So, you are left with $4950.00 to convert to pula. The current exchange rate for the pula is approximately P8.80 for $1.00. So, after wiring money you will have about P43,560.00 in your trading account ($4950.00 x 8.8).

      Next, you will choose a stock and ask the broker to invest all of the funds available in your account (P43,560.00). When you make a trade the cost of fees and commission will be deducted from your available funds. These costs amount to 2.07% of the transaction value plus P16.80. Deduct this and you are left with P42,660 available for the purchase of shares.

      Let’s assume you wish to buy shares of Letshego. Letshego shares are currently selling at a price of P2.30 per share. So to determine how many shares you can buy, you divide P42,660 by P2.30. You will arrive at a figure of 18,548 shares. This is approximately of Letshego you can currently buy with your $5000.00.

      Happy investing!
      Ryan

  26. merapelo sengalo says:

    If I buy choppies shares at P 3.00 in January 2013 and in December the same year the price has increased to maybe P4.13 I understand I have made profit. Let me say I bought 1000 shares my profit gain is 4.13-3.00=1.13 then I multiply with 1000 shares.1.13*1000=P1130
    Am I compelled to sell or should I wait for the price of the share to increase even more and more till next year 2014 with the hope that the prize of the share could increase higher.

    • You have discovered the art of investing, Merapelo. It’s all about knowing when and what to buy and when and what to sell.

      The market will not compel you to sell. You must judge whether you think the price has gone too high or could still go higher. If you think it has gone too high, you may want to sell and reinvest in a better-priced share.

  27. thabang keafentse says:

    Morning! I would like to buy shares from the Botswana Stock Exchange but I do not know how to get about it.

  28. Murfmensch says:

    This is an interesting site.

    Is there something like an index fund whereby I can invest in the whole exchange at once or a least a good number of companies?

    If there a pan-African index fund?

    Also, are there index funds that are organized to promote social aims or at least avoid destructive results in Africa?

    I would be interested in something socially responsible and diverse, which put dividends right back into the index fund. I am small-scale but thinking long term.

    Best of luck.

  29. Hi Ryan, Thank you for the info. I’m new to this and I really want to invest the money left by my mom after she passed away and my mind was on shares. The problem is I don’t really know which company to buy or how much money to use.

    • Hi Lebo,

      Buying stocks can be a little frightening at first because of the level of risk involved. One way to reduce this risk is to avoid putting all of your eggs in one basket. Invest in several companies – not just one. In fact, in Botswana, where commissions are charged on a percentage basis, you can invest in 10 different companies without paying any more in fees than if you had invested in only one. So, diversify your investment, and as your knowledge of the market grows, you can begin investing larger sums in companies that look to be better bargains.

      As far as how much to invest, I would suggest only investing that money that you can invest in shares and not touch for five years or more. Stocks are not guaranteed to increase in value, so only invest money that you can afford to lose.

      Hope this helps and keep us posted on how things go for you!
      Ryan

  30. How do you lose in stocks? How does a fall of share price result in loss and can you lose without selling?

    • Good question, Moscalm. Your losses (and gains) are only locked in when you sell a share of stock. Before you sell, the value of your shares can rise and fall. These are often referred to as “paper” losses or gains.

      This idea of “paper losses” tempts some investors to hold on to shares that have dropped in value in a vain hope that the share price will recover even when the underlying company’s prospects look bleak. This can cause real damage to a portfolio. Sometimes it’s best to sell for a loss and reallocate to stocks with better value.

  31. Interested in buying shares, just curious on what I should look out for and how much would be a good amount to buy decent shares?

  32. Which of these yields better returns, trading in stocks or saving your money in an interest earning account?

  33. Hi Ryan

    Thanks for you page – it’s a great way to discover ways to invest in small markets such as Botswana! May I ask you two questions on the subject?

    - If I invest in Botswana, I got to change money to Pula. How big is the currency-risk related to US-dollars?

    - What about liquidity risk? I have seen that there is not very much trading going on compared to big markets. Will I always find a counterparty that is willing to trade? And if so, is the spread between bid/ask more costly than in “developed” markets?

    Thanks for your answer in advance! Greetings Max

  34. Bokang Motlhoki says:

    how do i register for share in botswana?

  35. Are you able to offer advice on buying, new shares by analysing the current market especially for someone who already has some shares and wishes to buy more

    • Hi Kgogobi,

      I generally hold my favorite stocks pretty close to my vest, but I am contemplating a premium service that would highlight African companies that I believe exhibit exceptional value. Stay tuned!

      All the best,
      Ryan

  36. Anonymous says:

    where can i find brokers in botswana, and are brokers companies or individuals?

  37. Anonymous says:

    I am interested in invest but first i want to understand the procedures to be followed, what is needed and how much do i need to invest.

  38. hi..Can you help me how do i buy shares from Johnsberg Stock Exchange..can you help me.
    m residing in Francistown

  39. Duncan Thebele says:

    Hie!
    I have just seen this this website now its very educating about investing in shares.
    i wanted to ask that is it possible to invest in Europe like London stock exchange while in Africa like in Botswana?

  40. moonga chowe says:

    which country is better to invest in between bostwana and zambia?.am a zambian.

    • Hi Moonga,

      If you are Zambian, I would advise that you first invest in Zambia. I say this because you will be more familiar with the companies listed on the exchange, and will, perhaps, have a better sense of what their advantages and opportunities are.

      Hope this helps!
      Ryan

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