The Botswana Stock Exchange (BSE)’s main platform, the Domestic Companies Index, enjoyed another strong year, rising by more than 12.2% and adding P6 billion in value despite tightening conditions in the economy.

Last year, the DCI rose 15.5%, the strongest performance since 2013, powered by heavyweight counters in tourism, banking and finance.

This year, the movers were a mixed bag, although banks and financial institutions such as Standard Chartered Bank Botswana, First National Bank Botswana, BIHL and Absa were all amongst counters whose share prices rose. Only Access Bank, amongst the banks, was marginally down one percent as at Press time on Wednesday.

Leading the DCI in the year to Press time on Wednesday, was Sechaba Holdings whose share price was up by 41.4%, followed by Standard Chartered Bank Botswana (32.3%), Botswana Telecommunications Limited (27.7%), Sefalana (23.6%) and Cresta Marakanelo (21%).

The top five gainers in the year represent sectors such as retail, hospitality, telecommunications and hospitality, indicating that the local Exchange generally gained value during the year, despite broader economic difficulties.

The Finance Ministry expects the economy to contract by 1.7% this year, due largely to the prolonged downturn in diamonds and the impact this is having across other sectors of the economy. Should that forecast be confirmed, it will be the worst since 2020 when COVID-19 caused a contraction of 8.7% - the second worst in the country’s history.

“It is worth noting that the majority of the counters continue to experience positive share price momentum, with 21 of the 32 companies registering share price appreciation,” BSE officials said in note released this week on the performance to November.

BSE acting CEO, Kopano Bolokwe, told BusinessWeek, said listed companies were posting strong performances and returning value to shareholders.

“If you look at the annual reports and interim financials, most companies have reported strong operational earnings and profits, on the back of business expansion, rationalisation of operations in some parts, and diversification of core income streams which speaks to innovation and efficiencies,” he said in a written response to enquiries. “Most have handsomely rewarded shareholders with improved dividend payouts. “These must have supported the return expectations and translated into the growth that we have witnessed in share prices.”

Bolokwe added that the BSE has been able to promote trading and liquidity in dual listed stocks like Investec and Anglo, and has seen a couple of trades, mostly coming from the primary market, which have helped in the price discovery of the dual listed stocks.

“This has also helped the correction of their valuations and ultimately the positive changes we have seen in the foreign market cap and the total market cap. “As we continue to promote market making, we expect this to be consistent going forward,: he said.

While stock exchanges are known to be indicators of the broader economy’s health, analysts have said the DCI this year also benefited from an uptick in capital market liquidity particularly earlier in the year, as a result of statutory changes to pension fund investment rules. Under the changes, local pension funds are required to repatriate more of their assets to the domestic market, from offshore, in a phased manner until 2027 when they should meet a 50% minimum threshold.

“The move increased the liquidity of the local capital market, with asset managers scrambling for the limited investable assets such as shares, leading to higher prices,” one analyst told BusinessWeek.

Besides share price movements, the BSE also noted strong turnover across the various boards during the year, a trend that generally indicates both higher trading volumes and rising share prices.

The top three traded companies in the months to the end of November were Sechaba (P244.6 million), CA Sales (P164.3 million) and FNBB (P162.3 million).

“It is remarkable that all 32 stocks listed on the BSE have been actively traded this year,” BSE officials said in their recent update.