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Annual Report 2013

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Annual Report2013

1989Launch

1994New legislation

2003Fully independent entity

2006Developing the capital market

2008BSE Board Charter

2013 and beyondReaching new heights

BOTSWANA STOCK EXCHANGE Annual Report 2013 BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

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2013 HIGHLIGHTS

COMPANY OVERVIEW

BOARD MEMBERS

MANAGEMENT TEAM

OUR STAFF

COMPANY REVIEWS

CHAIRPERSON’S STATEMENT

CEO’S REVIEW

COMPANY STRATEGY

CORPORATE GOVERNANCE

ANNUAL FINANCIAL STATEMENTS

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98

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TABLE OF CONTENTS

BOTSWANA STOCK EXCHANGE Annual Report 2013 BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

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98

101

BOTSWANA STOCK EXCHANGE Annual Report 2013 BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

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BOTSWANA STOCK EXCHANGE Annual Report 2013 BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

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2013 HIGHLIGHTS

• TradingRulesforbothEquityandDebtInstruments infinalstagesofreview

• ShumbaCoallistedontheForeignVentureBoard throughprivateplacement

• BSElaunched3bondindices,theGovI,CorpIandthe BBI(Composite)

• BondIndexAdvisoryCommitteeappointed• BotswanaBondMarketAssociation(BBMA) successfullyregisteredwiththeRegistrarofSocieties inSeptember

• BotswanaBondMarketAssociation(BBMA) Committeeappointed

• InauguralSeniorSecondarySchools’BSEFinanceand InvestmentQuizsuccessfullyhosted

• Two-dayworkshoponGlobalDepositaryReceipts (GDRs)conducted

• WorkshoponExchangeTradedFunds(ETFs)hosted

• BSEadoptedtwoprimaryschoolsandrefurbished theirlibrariesundertheAdopt-A-SchoolInitiative

• TheBSE’s2012AnnualReportclinchedtheBest AnnualReportintheNot-for-ProfitsectoratthePrice WaterhouseCoopersAnnualReportAwards

P2.3Bnachieved

Recordturnoverof

BettaBetaETFreacheditshighestpricesincelistingontheBSE,of

P40.60inOctober

DCI appreciatedby

20.5%

Regular tradingsessions intheATS extended by a total of 1hour,from1hour45minutesto2hours45minutes

NumberofAccountsopenedCSDincreasedby13.5%to

20,027accounts

1hr

BOTSWANA STOCK EXCHANGE Annual Report 2013 BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

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VISIONTo be the leading Stock Exchange in Africa

MISSIONTo provide and operate a fair, transparent and efficient stock market for all stakeholders in order to optimise national economic empowerment.

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MISSION &VISION STATEMENTS

VALUES

WetakePRIDEinwealthcreation

PASSION • Creativity&Innovation

• PersonalLearning,Growth, Development • Coaching&Developingothers

RESPECT • Teamwork&Collaboration

• KnowledgeSharing& Communication

• CustomerOrientation

INTEGRITY • Corporate&PersonalEthics

• Credibility,Transparency& Accountability

• RiskManagement

DISCIPLINE • CommittedtorealizingValue andconvertingValuetoa CompetitiveAdvantage

• CommittedtoContinuous Improvement

EXECUTION • AchievementDriven

• Excellence

• ResultsFocused

BOTSWANA STOCK EXCHANGE Annual Report 2013 BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

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Reaching new heights isthe result of strategic planning and strong determination””

COMPANY OVERVIEW

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BOTSWANA STOCK EXCHANGE Annual Report 2013

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COMPANY OVERVIEW

Therewereonly5 listedentitieswithasinglebrokingfirmi.e.Stock Brokers Botswana Ltd (SBB), which was also chargedwith facilitating tradingon theexchangevia thematchingoforders.InordertoencourageforeigninvestorstoBotswanaaninterimexchangecommitteewassetupinOctober1990withrepresentativesfromtheprivateandpublicsector,includingthesecretaryoftheZimbabweStockExchange,thechiefexecutiveofSBB,thepermanentsecretaryoftheministryoffinance,andtheDeputyDirectoroftheBankSupervision.Thecommitteehadthepowertolistandtode-listastock,andwasalsoresponsiblefor ensuring that the BSE traded ethically [Ruben Lee, 1998].Thenecessitytodetachtherunningoftheexchangefromthebrokingbusinesssetinmotionaprocessfortheestablishmentofanindependentexchange.

In September 1994, the legislation to transform theBSM intoa full exchangewaspassedbyParliamentpaving theway fortheestablishmentoftheBotswanaStockExchange(BSE)wheretrading opened inNovember 1995. InMarch 1998, Ernst andYoungtookthefulladministrationoftheBSE.WitheffectfromJuly2001,afulltimeChiefExecutiveOfficerwasappointedwiththe aim ofmaking the BSE completely independent. In April2003, in order to better execute the affairs of the Exchange,better serve stakeholder, and be more responsive to globalevents and to remain competitive, the BSE discontinued thesecretarialroleofErnstandYoungBotswanatobecomeafullyindependententity.

TheBSEcontinuestobepivotaltoBotswana’sfinancialsystem,and in particular the capital market, as an avenue on whichgovernment, quasi- government and the private sector canraisedebt and equity capital.TheBSEplays host to themostpre-eminent companies doing business in Botswana. Thesecompaniesrepresentaspectrumof industriesandcommerce;theseareBanking,FinancialServices,WholesalingandRetailing,Tourism, Energy, Funeral Services, Property, Security andInformationTechnology.Currently,thereare35listedentitiesintheBSEandcompriseof23domesticand12foreigncompanies.

BOTSWANA STOCK EXCHANGE REGULATORY ENVIRONMENT

The main law which governs all the activities between theExchange and its members, the proceedings of the MainCommitteeand itscomposition; the relationshipbetweentheMinisterandtheExchangetogetherwiththerelationsbetween

theRegistrar,istheBotswanaStockExchangeActNo11of1994.TheBSEisregulatedbytheNonBankingFinancialInstitutionsRegulatoryAuthority.

ThemembershavepromulgatedRules (MemberRules)whichprovide the requirements to be fulfilled for the securitieslistedandtradedontheExchange.MembersRulesprovideasthe main objective thereof, “to operate a Stock Exchange inBotswanawithdueregardtothepublicinteresttomaintainfairandefficientdealinginsecuritiesfortheprotectionofinvestorsandregulatetheaffairsofmembers”.

In addition, the Exchange has a set of Listing Requirementswhich provide the pre-listing requirements and post listingrequirementstobeobservedbytheissuersoflistedsecurities.The emphasis is to make sure issuers disclose as muchinformation to thepublic and investors so that the latter canmakeinformedinvestmentdecisions.

CORPORATE INFORMATION

BSE Office:OfficeBlock6Plot64511,FairgroundsPrivateBag00417Gaborone

Independent Auditors:KPMG

Bankers:BarclaysBankofBotswanaLimited

OUR PRODUCTS

TheBSEaimtobecomeafinancialsupermarket,meaningitaimstoprovidetherightkindofproductstosuitinvestorandissuersothat itmeetgrowingcustomerdemandsandchallengesoftheglobalisationoffinancialmarkets.Thiscanbedonethroughproduct innovation and diversification. Current products thatcan be listed include Equities, Corporate Bonds, GovernmentBonds,ExchangeTradedProductsandCommercialPaperswhileproducts being developed are Global Depository Receipts,SecuritisedProductsandDerivatives.

The Botswana Stock Exchange (BSE) is Botswana’s national stock exchange given the responsibility to operate

and regulate equity and the fixed interest security market. Formally established in 1989, the BSE trace its humble

beginnings to when it was known as Botswana Share Market (BSM). At that time there was no formal stock exchange

in Botswana and the BSM traded as an informal market.

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BOARD MEMBERS

PATRICK O’FlAHERTYCHAIRPERSON

REGINA VAKAVICE-CHAIRPERSON

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GREGORY MATSAKETREASuRER

BOARD MEMBERS

ElAINA GONSAlVES MEMBER

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KABElO MOHOHlOMEMBER

IPONENG SENNANYANAMEMBER

BOARD MEMBERS

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BOARD MEMBERS

GOITSEONE KGAOdIMEMBER

JOHN KIGGuNduMEMBER

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MANAGEMENT TEAM

HIRAN MENdIS CHIEF EXECuTIVE OFFICER

THAPElO TSHEOlEdEPuTY CHIEF EXECuTIVE OFFICER

Mr.HiranMendiswasappointedCEOoftheBSEinJuly2006.Prior to joining the BSE he was the Director General of theColomboStockExchangeinSriLankafor9years.MrMendisisaFellowMemberofCIMAandholdsMBAandMA(Economics)degrees from the University of Colombo having graduatedSummaCumLaude inbothMastersdegrees.MrMendiswasPastPresidentofCIMASriLankaDivisionandhasservedasaco-optedMemberontheCouncilofCIMAinLondonandasaDirectoroftheSouthernAfricanregionalBoardofCIMA.HeisarecipientoftheCIMABronzeMedal.

Mr Tsheole joined the BSE in February 2007 as ProductDevelopment Manager. Prior to joining the BSE he workedfor Bank of Botswana on different units of the FinancialMarket Department as a Dealer and Settlement Supervisor.He graduated with a BA in Economics from the Universityof Botswana, and holds aMaster of Commerce in FinancialMarketsfromRhodesUniversity(RSA).HealsoholdsaMasterinBusinessAdministration(MBA)fromtheGraduateSchoolofBusiness,UniversityofCapeTown-UCT(RSA).HeisaRegisteredPerson (RPE) under the South African Institute of FinancialMarkets and Agricultural Product Dealer with FinancialDerivatives Division (SAFEX). He is a Member of Institute ofSouth Africa Financial Markets. He attended the LeadershipDevelopment Programme at the University of StellenboschBusinessSchool(RSA).

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MANAGEMENT TEAM

Ms.PhetojoinedBotswanaStockExchangeinDecember2007asCSDManager.PriortojoiningtheBSEshewasMarketRiskManageratStanbicBank,Botswana.Beforethen,sheworkedforBankofBotswanaondifferentunitsoftheFinancialMarketDepartment as a Dealer, Settlement Officer and PortfolioAnalyst. She graduated with a BA in Economics from theUniversity of Botswana, and holds a MA in Economics fromUniversity of Stellenbosch (RSA). She is currently pursuingCIMAManagerialLevelhavingcompletedtheCIMADiplomainManagementAccounting.

Mrs. Akanyang joined BSE in January 2007 as a MarketDevelopment Manager. Prior to joining the BSE, she helddifferent positions at international institutions such asGeneralElectricandFirstStarBankintheUSA.SheholdsaBSBA Economics/Human Resources from Xavier University(USA)andMAinEconomicsfromtheUniversityofCincinnati(USA).

MASEGO P. PHETOCENTRAl SECuRITIES dEPOSITORY MANAGER

lAME AKANYANGMARKET dEVElOPMENT MANAGER

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KOPANO MOGOROSIINFORMATION TECHNOlOGY MANAGER

Mr.MogorosijoinedtheBSEinJanuary2008asaSystemandNetworkAdministrator.InJune2009,hewasredeployedtotherole ofDatabaseAdministrator, a position that he held untilOctober2011,whenhewasappointedtotheroleofActingITManager.HeassumedtheroleofITManagerinMay2012.Priorto joining the BSE,MrMogorosiworked for Rural IndustriesPromotions Company Botswana (RIPCO) as a SystemsAdministrator.HehasalsoworkedforDCDMConsultingasanAnalyst/Programmer.MrMogorosiholdsaBSc inComputerEngineeringfromtheUniversityofMiami,FL(USA).

lATElANG CHAKAlISACORPORATE AFFAIRS MANAGERMrs.ChakalisajoinedtheBSEinJune2009asCorporateAffairsManager. Prior to joining the Botswana Stock Exchange, shewas Senior Manager, Securities at Stanbic Bank BotswanaLimited. Before then, she worked for the Attorney General’sChambers as a Senior State Counsel in the Civil LitigationDepartment.SheholdsanLLBfromtheUniversityofBotswanaand is currently pursuing an MSc Strategic ManagementthroughtheUniversityofDerby,UK.SheisaBoardMemberoftheBotswanaInstituteofTechnology,ResearchandInnovation.

MANAGEMENT TEAM

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MANAGEMENT TEAM

MPHO MOGASHAFINANCE ANd AdMINISTRATION MANAGER

Mrs.Mogasha joined the BSE in 2006 as OperationsOfficer-Finance & Admin, a position she held until July 2013, whenshe was appointed to the role of Acting Finance & AdminManager.SheassumedtheroleofFinanceandAdministrationManagerinFebruary2014.PriortojoiningtheBSEsheworkedfor Motswedi Securities as Accountant. Before then, sheworked for Grunwald Construction as Assistant Accountant.Mrs. Mogasha graduated with a BA in Accounting from theUniversityofBotswana.SheisACCAqualifiedandamemberoftheBotswanaInstituteofCharteredAccountants(BICA).

TSAMETSE MMOlAIlISTINGS ANd TRAdING MANAGER

Mr. Mmolai joined BSE in May 2008 as Listings and TradingOperations Officer. Prior to joining BSE, he was the BranchManagerforMetropolitanLifeFrancistownoffice.Beforethen,heworkedforBifmasanInvestmentAccountant.Mr.MmolaigraduatedwithaBCom (Finance) fromMacquarieUniversityinAustraliaand isanAccreditedMemberof theComplianceInstituteofSouthernAfrica.

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COMPANY STRUCTURE

Board

Human Resource Manager

Human Resource

Administrator

Receptionist

Driver

Information Technology

Manager

Database Administrator

Network System

Administrator

Finance Manager

Management Accountant

Financial Accountant

Product Development

Manager

Product Development

Officer

Listings and Trading

Manager

Listings and Trading

Officer

Monitoring and Surveillance

Officer

Market Development

Manager

Market Development

Officer

Legal and Corporate Affairs

Manager

Legal and Corporate Affairs

Officer

CSD Manager

CSD Officer

Human Resource Manager

Chief Executive Officer

Internal Auditor Executive Assistant

Deputy

Chief Executive Officer

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OUR STAFF

BackRow(righttoleft):TebogoLehubitsa,KopanoBolokwe,HiranMendis,ThapeloTsheole,JudithGabonewe,TebogoTebogo,KgosiTherego3rdRow(righttoleft):AmbrosiaKhupe,TsametseMmolai,MafokoMakhao,KelemosadiGaorengwe,LatelangChakalisa,2ndRow(righttoleft):MphoMogasha,BaboniKhupe,JusticeBakwadi,NomsaOtsogile,FrontRow(righttoleft):TapiwaTamocha,NonofoPhalatse,LameAkanyang,OnkabetsePitso

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We believe that our quest to reach new heights, does notbelong solely to us, but encompasses our communities aswell.WeunderstandthechallengesthatourfellowBatswanaface and are aware that even though people may bedisadvantaged,theystillhavegoalsandambitions.

Our initiatives are geared to ignite possibility in the livesof those less fortunate than us.We are unwavering in ourdetermination to help others reach new heights in theirpersonallivesandcommunities.

OurCorporateSocialInvestmentinitiativewassuccessfullyundertakenwiththeadoptionoftwoprimaryschoolsin2013, namely Sebele Primary School and Xakao PrimarySchool.WealsoworkedwithSassyDivaonthe‘DonateaPad’project.

GIVING BACK

Weareunwaveringinour

determinationtohelpothers

reachnewheightsintheirlives

andcommunities.

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Reaching new heights, amidst seemingly insurmountable challenges, is achieved through the strength of the collective.””

• Chairman’s Statement• Chief Executive Officer’s Review• Graphical Review• Market Statistics

COMPANY REVIEWS

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PATRICK O’FlAHERTY CHAIRPERSON

“Another achievement in 2013 was the notable rise in the number of Central Securities Depository

accounts opened with the number of accounts increasing by 13.5% to 20,027 compared to 17,638

in the previous year. This highlights the current growth of Botswana’s equity market and the

continued rise in individual investor interest and participation. This rise is furthermore indicative of

the effectiveness of the BSE’s market development initiatives during the year which strived to garner

as much participation from stakeholders as possible.”

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CHAIRPERSON’S STATEMENTDearStakeholders

IamdelightedtoreportontheremarkableperformanceoftheBotswanaStockExchange(BSE)duringtheyear2013.Despitechallengesbothregionallyandglobally,thereisnodoubtthattheBSE’soverallperformancewasaidedbytheimplementationof theAutomatedTrading System in 2012 and the continuedgradualrecoveryoftheeconomyfromtheglobalfinancialcrisisof2008.

It is pleasing to note that in the year under review the BSEregisteredthehighestturnoverlevelssinceitsinceptionin1989,recordingtotalturnoverofBWP2.3billion,orBWP9.3mperday.This is 2.6 times the turnover recorded theprevious year andapproximatelytwicetheturnovergeneratedontheBSEin2008(highestupto2013).

The Domestic Company Index (DCI) reached its highest levelsinceNovember2007,recordingasignificantincreaseof20.5%in2013(thehighestannualappreciationintheDCIsince2007).The BSE successfully launched 3 bond indices in April 2013.These were the; GovI – a government bond index, CorpI – acorporatebondindexandtheBBIwhich isacomposite indexcomprisingbothgovernmentandcorporatebonds.Thebondindices are a welcome development and have provided abenchmarkforportfoliomanagerstoevaluatetheperformanceoftheirbondportfolios.ThelaunchofthesethreebondindicesbeartestamenttotheBSE’scommitmenttoinnovationandthedevelopmentofBotswana’sbondmarket.

The BSE was instrumental in registering the Botswana BondMarketAssociationwiththeRegistrarofSocietiesinSeptember2013.Theobjectivebehindthisinitiativewastocreateaforumfor the discussion of Bond market related issues and moreimportantly, for the BSE to take into account the views ofparticipantsinitsdevelopmentstrategy.

Another achievement in 2013 was the notable rise in thenumber of Central Securities Depository accounts openedwith the number of accounts increasing by 13.5% to 20,027compared to 17,638 in the previous year. This highlights the

currentgrowthofBotswana’sequitymarketandthecontinuedriseinindividualinvestorinterestandparticipation.ThisriseisfurthermoreindicativeoftheeffectivenessoftheBSE’smarketdevelopmentinitiativesduringtheyearwhichstrivedtogarnerasmuchparticipationfromstakeholdersaspossible.

Throughouttheyear,theBSEcontinuedtoundertakeitsmarketdevelopmentoperations,particularlywiththeaimofimprovingthestateoffinancialliteracyinthecountry.Theseactivities,suchasthefar-reachingpresentationstonumerouscompaniesandparastatalsaroundthecountry,newspaperarticlesandnationalradio and television programme features; have continued tostimulateparticipation inBSE listed investmentsbyBatswana.Severalon-on-onemeetingswithprivatecompanieswerealsoconducted during the year to inform them about the listingprocess and also to communicate the benefits that could begainedbylistingontheBSE.

Theneedforthecorporatesectortoengagemeaningfullywithlocalcommunitiescannotbeoverstated.Duringtheyearunderreview, theBSEadoptedtwoprimaryschoolsandrefurbishedtheir libraries under the Adopt-A-School Initiative. This waspartoftheBSE’sinitiativetomakeameaningfulimpactonthelivesofBotswana’sfutureleaders.AnothersuccessfuloutreacheffortwasthehostingoftheBSE’sInauguralSeniorSecondarySchools’ Finance and Investment Competition. Four schoolscompetedinthe2013eventandweanticipatethatparticipationin the competition will grow extensively as the competitionprogresses.

Wehaveonceagainaccomplishedalotoverthepast12monthsand I would like to extend the BSE’s sincere gratitude to allour stakeholders, our customers, our business partners whocontinuetosupportusandourendeavorsaswelookforwardtothefuturewithinterest.

Finally, I would like to thank my fellow Main CommitteemembersandtheBSEstaffandCEO,Mr.HiranMendis,fortheircontinuedsupport,adviceandhardworkduring2013andfortheirservicetotheExchange,itsclientsanditsstakeholders.

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“All in all, 2013 has been the best year, to date. A year in which the BSE has been propelled to ‘new

heights’ in more ways than one. The strides made in 2013 are just a miniscule realization of the

latent potential that exists for the development of the capital market in Botswana. The challenge in

front of all stakeholders is how to create momentum to sustain this change. Technology is only part

of the equation. The rest involves a change in thinking on the part of all stakeholders.”

HIRAN MENdIS CHIEF EXCECuTIVE OFFICER

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CEO’S REVIEW

Botswana is a country that is richly blessed with numerouscomparativeadvantages.Ithasrichendowmentsindiamonds,minerals and other resources that are indispensable to thegrowthoftheglobaleconomy.Thecountry’swildliferesourcesand its diversity has made it a much sought after touristdestination.SomehavereferredtoBotswanaas“thelastEden”.Thisistrueinmorewaysthanone.

Botswana also has many competitive advantages that it hascreatedforitself;astableeconomy,astablepoliticalsystem,thehighestcreditratinginAfrica,thelackofexchangecontrolsandbeinganexporterofsavingsmakeBotswanasomewhatuniqueintheworldofemergingmarkets.

Thiscombinationofcomparativeandcompetitiveadvantagescreates an ideal environment for economicdiversificationnotonlyinareassuchasinthevalueadditiontodiamondsbutalsoin thecreationoffinancial services, thecenterofwhich is thecapitalmarket.

ItistakingintoaccounttheseadvantagesthattheBSEmouldedandremouldeditsstrategysince2006culminatingininitiativesover a broad spectrumof areas engulfing the capitalmarket.Broadly speaking, these pillars of development includeinfrastructure, legislation, regulation and market & productdevelopment,amongstothers.

The BSE is indeed happy to note that progress has beenachieved onmany fronts in the year 2013. Most importantlythe Automated Trading System (ATS) has helped propel theBSEforwardandgeneratearecordturnoverofP9.3Mnperdayin2013.ThishasnotonlybeenthehighestturnoverrecordedsinceinceptionoftheBSEin1989butwas2.6timestheturnoverachievedin2012andwasalmostdoubletheturnoverachievedin2008,whichuntilthatpointhadbeentheyearwiththebestperformance.

In the CEO’s Review for 2012 I stated that “reaching out toinvestorsisallaboutbuildingrelationships”.Iftheserelationshipsare only limited to a few institutional investors then clearlyautomationasastrategyhaslittlevalue.

If theATS andCentral SecuritiesDepository (CSD) systemaretocontinue tocreatevalue then“reachingout”has toextendbeyond institutional investors. The information for 2013indicates that this process has indeed commenced. Localindividualturnoverin2013morethandoubledincomparisonto2012.

The BSE’s contribution to the continuation of this processinvolves further technological developments such as websitedevelopment, introduction of Internet based trading andinformation dissemination via data vendors. The Brokers’contributiontotheprocesshastodowithproactivelyreachingouttoinvestors,retailinvestorsinparticularandsupportingthemarketdevelopmentinitiativesoftheBSE.

TheBSEtracksitsperformanceincomparisontootheremergingmarketsinordertobenchmarkitself.TheExchangeishappytonote that theBSEhasmade large strides inbridging thegapthatexistsbetween itselfandothermarketsbenchmarkedforcomparative purposes. As can be seen from Section 8.3, theBSEfootprintincomparisontotheStockExchangeofMauritius(SEM)is72.8%in2013incomparisonto35.1%in2012and24.4%in 2011. If the Pulamovementwith theUSDollar is adjustedto reflect the movement of the Mauritian Rupee against theGreenback,theBSE’sfootprintwouldincreaseto75.5%ofthatofSEM.

Further,theincreaseinliquidityandturnoverin2013wasnotattheexpenseofstability.Stabilityofturnoverinfacthasimprovedin the year under review as evidenced by the coefficient ofvariationandotherstatisticsdetailedinSection3.5.On the financial front, the BSE did not have to depend onthe Government subvention to meet its operations anddevelopmentexpenditureforthethirdconsecutiveyear.Ontheotherhand,CSDBotswana(CSDB)whichhashadtodependonthesubventionsinceitsinception,didnothavetodosoin2013.

Allinall,2013hasbeenthebestyear,todate.AyearinwhichtheBSEhasbeenpropelledto“newheights”inmorewaysthanone.

1. REACHING NEW HEIGHTS

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Thestridesmadein2013arejustaminisculerealizationofthelatentpotential thatexists for thedevelopmentof thecapitalmarketinBotswana.Thechallengeinfrontofallstakeholdersishowtocreatemomentumtosustainthischange.Technologyisonlypartoftheequation.Therestinvolvesachangeinthinkingonthepartofallstakeholders.

Onthepartof theBSE ithastodowith lookingat innovativeways and means of serving the interests of all stakeholdersand balancing the competing interests of regulation anddevelopment.

Thebrokerscannotbepassiveobserversbutneedtoproactivelyreachouttoinvestorsespeciallyindividualinvestorswhoholdthekeytoimprovingthestabilityofturnover.

Listedcompaniesneedtoseevalueinbeinglistedandhavingaccesstoalargebodyofinvestorsratherthanbeingdependentonaselectfew.Itisamistaketonarrowlydefinetheobjectivesoflistedcompaniesbasedonwhattheydo.Alistingenablesacompanytobecomeindependentoffunctionalfocusandlookatbusiness froma farmorecomplexperspective. Itpromotesgood governance and enables the process of financialdisintermediation, thus creating the environment to createcompetitiveadvantagesandopportunitiesforgrowththatmaynothavebeenpossibleifitremainedunlisted.

Itisonlythroughtheinteractionofthevariousstakeholdersandeachappreciatingtheother’sresponsibilitiesthattherequiredmomentumcanbecreatedtosustainthechange.

2. ECONOMIC BACKDROP

2.1 World Economy

The International Monetary Fund’s (IMF) World EconomicOutlookupdatereleasedinJanuary2014,hasestimatedworldoutputtohaveexpandedby3.1%in2012,downfrom3.9%in2011. Global output is projected to expand by 3.0% in 2013,beforerecoveringslightlytogrowby3.7%in2014,underpinnedlargelybytherecoveryinadvancedeconomies.

Growth in advanced economieswas estimated to be 1.3% in2013comparedto1.4% in2012.Projections for2014 indicatethat advanced economies are expected to recover modestly

andregisteragrowthof2.2%duetoexpectationsofcontinuedaccommodativemonetarypolicyandfiscalconsolidation.

Emerging markets weakened slightly in 2013 with growthdecliningfromanestimated4.9%in2012to4.7%in2013.Therecoveryinemergingmarketsisforecastedtogetunderwayin2014withoutputexpectedtogrowby5.1%primarilyliftedbystrongerexternaldemandfromadvancedeconomies.

The update reiterates the downside risks to the forecastsdiscussed intheWorldEconomicOutlookreleased inOctober2013.Emergingeconomiesareverymuchatriskofcapitalflowvolatilitygiven that theFed (USCentralBank) is likely tostarttaperingitsmonetarystimulusin2014exertingupwardpressureon interest rates. This, combined with domestic weaknesses,could result incapitalflight toadvancedeconomiesandspurexchange rate volatility, in the process dampening growthprospectsforemergingmarkets.

2.2 Botswana Economy

The latest economic data for Botswana shows that in realterms,GDPgrewby5.9%in2013comparedtoarevised4.3%in2012. According toStatisticsBotswana, theacceleration inreal GDP growth in 2013 was mainly attributable to mining,which recorded an increase in value added of 10.6%. Theincrease inmining outputwas a reflection of the recovery indiamondproductionwhichwassubdueddueto lowdemandin2012.Miningremainedamajorcontributor toGDPwith itscontributionrisingto22.4%in2013comparedto19.9%in2012.

According to the 2014/2015 Budget Speech, the Ministry ofFinanceandDevelopmentPlanning(MFDP)hasestimatedthatrealGDP is expected togrowby5.1% in2014, fuelledby theexpectedgrowth innon-mining sectors such asTrade,Hotels&RestaurantsandFinance&Business sectors. It isnoted thattherelocationoftheDiamondTradingCentrefromLondontoGaboroneattheendof2013isexpectedtocontributepositivelyto theprospectsofgrowthof thedomesticeconomy,despitethe uncertainty that still exists in the external demand fordiamonds.However,forthemostpart,growthinthedomesticeconomy will continue to be guided by the recovery of theworldmarketgivenBotswana’sdependenceondiamonds.

Domestic inflation averaged 4.1% in 2013 in comparison to7.4%in2012.Thelowerinflationin2013reflectedthegeneral

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slowdowninpriceincreases.SinceJune2013,inflationhasbeenwithin theBankofBotswana’s (BoB)objective rangeof3% to6%.

On the back of the positive medium term inflation outlook,BoBpursuedanaccommodativemonetarypolicyduring2013,reducing the bank rate from 9.5% by a cumulative 200 basispoints(2%)betweenMayandDecember2013.During the yearunder review, thePuladepreciatedby 10.8%and14.9%againsttheUSDollarandtheEurorespectivelyandappreciatedby9.7%againsttheSouthAfricanRand.

According to the 2014/2015 Budget Speech, the subdueddemandfordiamondsbyadvancedeconomiesandtheslowinggrowth of emerging economies will negatively impact therecoveryintheminingsector.Inadditiontotheuncertaintyoftheminingrevenues,thedomesticeconomyisalsosusceptibletoshockstoSACUrevenuesandthiscouldhaveabearingonthe forecasted revenues and expenditure for 2014/2015. Therevenuefromthesetwosourcescollectivelyaccountedforover60%oftotalrevenuesin2013.

2.3 Implications for Capital Markets

It is expected that the forecasted increase in Governmentexpenditure, as reflected in the 2014/2015 Budget Speech,wouldstimulateprivatesectoreconomicactivitywhichisalsolargelydependentonGovernmentspending.

Itisexpectedthatanenvironmentoflowpredictableinflationwillallowforpositiverealinterestrateswhich,inturn,couldfostermobilisation of financial savings and productive investment.In particular, investors are expected to continue to seek realreturns in alternative investments such as in listed securities.

In 2013, the BSE embarked on a strategy to develop GlobalDepository Receipts (GDRs) which would enable equities offoreignlistedcompaniestobelistedandtradedontheBSE.Asthe global economy continues to recover, local investors willbebetterpositionedtodiversifyandbenefitfromexposuretointernationalstocksusingtheBSEasaconduittogainexposuretosuchmarkets,throughGDRs.

As stated in the 2014/2015 Budget Speech, Governmentintends toprivatisesomeof thestateownedentities in2014.The anticipated listing of the Botswana TelecommunicationsCorporation (BTC)andtheNationalDevelopmentBank (NDB),

will promote citizen economic empowerment and contributetoeconomicdiversification.TheBSEwelcomesthisprocessasitwilladdtoanincreaseinmarketcapitalisationandliquidityoftheBSEanddeepenthecapitalmarket.

3. EQUITY MARKET PERFORMANCE

3.1 Domestic Company Indices

TheDomesticCompany Index(DCI)closedtheyearat9,053.4points, its highest level since 21 November 2007, recordingan increase of 20.5%.This is the highest annual appreciationin the DCI since 2007. The performance of the DCI in 2013,overshadowed its performance in 2012 when the DCIappreciated by 7.7%. The DCI signalled a recovery from theeffectsofthefinancialcrisisin2008whenitregisteredapositivegrowthin3consecutiveyearsuptoandincluding2013.

Themodest appreciation in theDCI towards the endof 2012resultedintheDCIpickingupmomentuminQuarter1of2013,leading to an increase of 11.8%.The DCI further appreciatedby3.4%inQuarter2,beforeexperiencingadeclineof1.1%inQuarter3.InQuarter4,theDCIgained5.3%.

AnanalysisofthedifferencebetweentheDCIandtheDomesticCompany Free Float Index (DCFFI) and the relative impact ofdividendsandliquiditywhichaccountedforthedifferencewascarried out by computing a new index which measured thereturnsoftheconstituentsoftheDCIonamarketcapitalisationweightedandtotal returnbasis.Thenew indexcomputed forthepurposeofanalysisistheDCITotalReturnIndexorDCI(TRI).

All dividends paid during the year have been input into thecomputationoftheDCI(TRI)assumingtheex-dividenddateofthepaymentofsuchdividendsasbeing31December2013.ThishasbeendonetoeasethecomputationoftheDCI(TRI)forthepurposeofthisanalysis.

The difference of the percentage change between the DCIandtheDCI (TRI)canbeexplainedbythedividend impactastherelativeweightsused for thecomputationofboth indicesarebasedonmarket capitalisation. In contrast, thedifferencebetween the DCFFI and the DCI (TRI) explains the liquidityimpactofthepercentagechangeasbothindicesarecomputedtakingintoaccounttotalreturns.

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TheDomesticFinancialSectorIndex(DFSI)appreciatedby

in201317.0%

REACHING NEW HEIGHTS

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AcomparisonoftheDCIandtheDCFFIisdetailedinChartAofFigure1.Thedifferencebetweentheappreciationof23.3%and20.5%intheDCFFIandtheDCIcanbeexplainedbyadividendimpactof4.4%andaliquidityimpactofanegative1.6%.

The Domestic Financial Sector Index (DFSI) appreciated by17.0% in 2013 in comparison to a growth of 22.0% in theDomesticFinancialServicesFreeFloatIndex(DFSFFI).Itisnotedthat the Financial Services sector is the largest component intheDCIandDCFFI.

Chart B of Figure 1 further confirms the impact the differentindexcomputationmethodologieshavehadonthemovement

oftheindices.Inthiscasethedifferenceof5percentagepointsbetweentheDFSIandDFSFFIcanbeattributedtotheliquidityimpactinherentintheDFSFFIsincebothindicesarecomputedusing total returns thus negating any influenceof a dividendimpact.

AfurtheranalysisoftheliquidityimpactbetweentheDCIandDCFFIrevealsthatthefinancialsector’sliquidityimpactwas5%whereas the liquidity impact of the other sectors included intheDCIwasnegative6.6%.This indicatesthatthemoreliquidcompaniesinthefinancialsectorcontributedtoanappreciationofpricesincomparisontoothersectorswhichsawtheoppositeeffect.

Figure 1: Performance of Indices Computed on Domestic Companies

Weighting Returns Annual 2013Quarterly

MarketCap

Liquidity CapitalGains

TotalReturn

2012 2013 Q1 Q2 Q3 Q4

DCI 7,510.2 9,053.4 8,400.0 8,688.5 8,594.9 9,053.4

%Change 7.7 20.5 11.8 3.4 (1.1) 5.3

DCFFI 2,143.7 2,643.7 2,592.7 2,496.0 2,456.2 2,643.7

%Change 12.5 23.3 20.9 (3.7) (1.6) 7.6

DCI(TRI) N/A 24.9 N/A N/A N/A N/A

DFSI 911.8 1,067.1 1,035.9 1,057.7 1,018.4 1,067.1

%Change 5.7 17.0 13.6 2.1 (3.7) 4.8

DFSFFI 3,199.1 3,901.3 3,993.3 3,750.7 3,600.1 3,901.3

%Change 13.2 22.0 24.8 (6.1) (4.0) 8.4

Source: BSE

CHART A: DCI vs DCFFI CHART B: DFSI vs DFSFFI

95

100

105

110

115

120

125

130

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

DFSI DFSFFI

98

103

108

113

118

123

128

133

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

DCI DCFFI

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TheDomesticCompanyIndex(DCI)appreciatedby

in201320.5%

REACHING NEW HEIGHTS

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3.2 Foreign Company Indices

The Foreign Company Index (FCI) depreciated by 1.0% inQuarter 1, andby0.2% inQuarters 2 and3.TheFCIhoweverappreciatedby0.3%inQuarter4.Asat31December2013theFCIhaddeclinedby1.0%toclosetheyearat1,583.5points

comparedtoadepreciationof6.1% in2012.Asseen inChartCinFigure2,theForeignResourcesSectorIndex(FRSI)closelyreflectedthegrowthpatternfollowedbytheFCIgiventhatthelargestsectorincludedintheFCIistheResourcessector.

Figure 2: Performance of Indices Computed on Foreign Companies

Weighting Returns Annual 2013Quarterly

MarketCap

Liquidity CapitalGains

TotalReturn

2012 2013 Q1 Q2 Q3 Q4

FCI 1,599.5 1,583.5 1,584.3 1,581.2 1,578.8 1,583.5

%Change (6.1) (1.0) (1.0) (0.2) (0.2) 0.3

FRSI 731.9 720.3 724.3 722.3 721.1 720.3

%Change (7.4) (1.6) (1.0) (0.3) (0.2) (0.1)

Source: BSE

CHART C: FCI vs FRSI

98.2

98.4

98.6

98.8

99

99.2

99.4

99.6

99.8

100

100.2

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

FCI FRSI

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BOTSWANA STOCK EXCHANGE Annual Report 2013

REACHING NEW HEIGHTS

3.3 Local Asset Sector Companies

TheLocalAssetStatus Index (LASI)andtheLocalAssetStatusFreeFloatIndex(LASFFI)compriseofalldomesticcountersandforeigncompanies thathavebeenawarded localasset status.Bothindicesaretotalreturnindicesandthedifferencebetweenthe performances of the 2 indices is solely explained by theweightingmethodology.

In 2013, the LASI’s appreciation of 1.1% against the LASFFI’sappreciationof22.4%canbeexplainedbytheperformanceofliquid domestic companies. The appreciation of 22.4% in theLASFFIislargelyattributabletotheappreciationof23.3%intheDCFFIasthemajorityofdomesticcompaniesintheDCFFIcontributeasignificantproportionoftheLASFFI.

Fromaliquiditystandpoint,theimpactoflargecompaniesbymarket capitalisation, such as Anglo American, is minimizedin the computation of LASFFI whereas it remains significantintheLASI.ThemutedperformanceoftheLASIcanthereforebeattributed to theperformanceofAngloAmerican. In2013Angloconstituted88.1%ofthetotalmarketcapitalisationoftheLASIanditssharepriceontheBSEdidnotchange.AsaresultthegoodperformanceoftherestoftheconstituentsoftheLASIwasweigheddownbytheinertiaofAnglo,resultingintheLASIonlyappreciatingby1.1%.

Chart D: LASI vs LASFFI

Figure 3: Performance of Indices Computed on Local Asset Companies

Weighting Returns Annual 2013Quarterly

MarketCap

Liquidity CapitalGains

TotalReturn

2012 2013 Q1 Q2 Q3 Q4

LASI 752.7 760.8 754.1 755.3 753.4 760.8

%Change (5.4) 1.1 0.2 0.2 (0.3) 1.0

LASFFI 1892.1 2315.3 2268.4 2179.8 2149.6 2315.3

%Change (12.8) 22.4 19.9 (3.9) (1.4) 7.7

Source: BSE

98

103

108

113

118

123

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

LASI LASFFI

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3.4 Sector Contributions to Performance of the DCI and the FCI

Figure 4 details the analysis of sector contributions to theperformance of the DCI and the FCI. As can be deduced,all sectors other than Information Technology and SecurityServices,contributedpositivelytothe20.5%growthintheDCI.

In2013,theBankingsectorwasthedominantsectorcontributing8.1 percentage points to the growth in the DCI. This sectorhasgreatlyinfluencedtheDCIin2010and2011andwasonlyovershadowedbytheRetail&Wholesalingsectorin2012whichin 2013was the second largest contributor at 7.2percentagepoints.AscanbeseenfromFigure4,FinancialServices,Retail&WholesalingandBankingsectorshaveaccountedforover90%ofthegrowthintheDCI.Thisisnotsurprisinggiventhatthese3sectorsarethemostliquidandaccountformorethan84.2%ofthedomesticmarketcapitalisationoftheBSE.

ThecontributionbytheBankingsectorismainlyattributedtotheappreciationinthesharepriceofFNBB.Atcompanylevel,the share price of FNBB appreciated by 43.9%, resulting in acontributionof8.2percentagepointstotheoverallgrowthof20.5%oftheDCI,despiteotherstockshavingappreciatedmorethanFNBBin2013.FNBB’scontributionwasunderpinnedbyitshighweightageintheDCIin2013.

Choppieswas the secondbest contributor to theDCI,with acontributionof3.9percentagepoints.Letshego,whichwasthemostliquidstockin2013,wasthethirdhighestcontributorat3.3 percentage points. In addition to these companies, othermaincontributorstotheDCIwereSefalanaandSechabawhichcontributed1.6%and1.3%respectively.

In2013,thetop5companiesaccountedfor89.1%ofthegrowthintheDCIincomparisonto86.0%in2012.

On the Foreign Equity Board the Mining & Minerals sectorcontinued its dominant influence on the performance of theFCI.Thissectorcontributedanegative1.03%andoutweighedtheFinancialServicessector’scontributionofapositive0.03%.ThisresultedintheFCIdepreciatingby1.01%.

ThisisnotsurprisinggiventhatthemarketcapitalisationoftheMining&Mineralssectoraccountedfor95.2%of total foreigncompanies’marketcapitalisationin2013,andthattheFCI isamarketcapitalisationweightedindex.

Figure 4: Sector Contributions to Performance of the DCI and the FCI

2013

DomesticBoard 2012 2013 Q1 Q2 Q3 Q4

FinancialServices 2.36 3.34 3.77 0.68 -0.99 0.23

Retail&Wholesaling 3.29 7.22 3.02 0.97 1.29 3.11

Property 0.95 1.10 0.06 0.09 0.20 0.80

Banking 1.35 8.14 5.20 1.71 -1.51 0.29

InformationTechnology 0.01 -0.03 -0.00 -0.00 0.00 -0.03

SecurityServices -0.03 -0.57 -0.00 -0.04 -0.30 -0.44

Tourism -0.39 0.17 -0.35 -0.09 -0.01 0.65

Energy 0.25 0.81 0.11 0.09 0.25 0.48

FuneralServices -0.04 0.36 0.05 0.03 -0.01 0.24

DCI 7.74 20.55 11.85 3.43 -1.08 5.33

ForeignBoard

FinancialServices 3.03 0.03 0.00 0.00 0.00 0.00

Mining&Minerals -9.16 -1.03 0.00 0.00 0.00 0.00

FCI -6.13 -1.01 -0.95 -0.20 -0.15 0.30Source: BSE

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3.5 Liquidity

Figure5detailstheturnoverandliquidityontheBSEsince2009.The average daily turnover for 2013 was P9.3 Mn per day incomparisontoP3.6Mnin2012andP4.1Mnin2011.Thevolumeofsharestradedin2013wasarecord710.5Mnincomparisonto 409.9Mn in 2012 and 458.7Mn shares in 2011.Themaincontributorstoturnoverin2013wereLetshegoandChoppies.

Theyear2013standsoutastheyearinwhichtheBSEregisteredthehighestturnoversinceitsinceptionin1989.Theamountofturnoverin2013isalmostdoubletheturnoverrecordedontheBSEin2008(highestupto2013)andis2.6timestheturnoverin2012.Thevolumeofsharestradedin2013was1.7timesthevolumein2012.Theyear2013canalsobedescribedasayearinwhichthestabilityofturnovercontinuedto improve,albeitmarginally.

The coefficient of variation of turnover was lowest in 2013,further compounding that stability of turnover has indeedimproved. From the BSE’s point of view this is a welcomedevelopmentsinceturnoverwasgeneratedinamoreconsistentmanner,anindicationofthegrowingsustainabilityinliquidity.

ItcanbeobservedthattradingactivityintermsofvolumeandvalueofsharestradedwashighestinQuarter4incomparisonto the other quarters of 2013. The average daily turnover ofP13.8MnperdayachievedinQuarter4of2013isthehighestturnoverachievedinanyQuarterinthehistoryoftheBSE.Thiswas largely due to the turnover generated from transactionsin Choppies. Choppies generated a turnover of P204.4Mn inQuarter4throughthetransactionof66.8Mnshares.

Figure7 shows the LorenzCurveanalysis for turnover for theyears2010to2013.InthiscontexttheLorenzCurveanalysisisused to illustrate the relative dispersion of turnover from theaveragedailyturnoverfortheseyears.Thelessconvexthecurverelativetothelineofzerodispersion,theloweristhedispersionand consequently the more stable the turnover. The LorenzCurveprovidesfurthersupporttothedeductionthatturnoverwasmore stable in 2013 in comparison to the other years asseenfromChartAinFigure7.

Fromanalternativepointofview,thepercentagecontributiontoturnoverbycompaniesonacumulativebasisshouldreflectthepercentageofthenumberofcompaniesfromwhichsuchturnoverisgenerated.ThisanalysisisdetailedinChartBofFigure

Figure 5: Indicators of Liquidity: 2009 to 2013

Indicators 2009 2010 2011 2012 2013

Turnover(P'Mn) 763.8 962.8 1,007.9 894.7 2,315.4

AverageDailyTurnover(P'Mn) 3.1 3.9 4.1 3.6 9.3

Turnover/AverageMarketCap(%) 2.7 3.5 3.5 2.7 5.9

StandardDeviation 7.7 8.6 13.5 6.9 15.9

CoefficientofVariation(CoV) 2.5 2.2 3.3 1.9 1.7

No.ofSharesTraded(Mn) 167.6 308.7 458.7 409.9 710.5

SharesTraded/SharesListed(%)Note1 2.9 3.9 4.8 4.3 6.3Note 1: For Domestic Companies and based on average shares traded

Source: BSE

Figure 6: Quarterly Market Turnover: 2013

Indicators Quarter1 Quarter2 Quarter3 Quarter4

Turnover(P’Mn) 250.8 684.1 510.4 870.1

AverageDailyTurnover(P‘Mn) 4.1 11.0 8.2 13.8

Turnover/AverageMarketCap(%) 0.7 1.8 1.1 2.0

StandardDeviation 6.4 11.8 9.5 23.5

CoefficientofVariation 1.6 1.1 1.4 1.7

No.ofSharesTraded(Mn) 99.8 229.3 134.5 246.9

SharesTraded/AverageSharesListed%)Note1 0.9 2.0 1.1 2.2Note 1: For Domestic Companies

Source: BSE

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Figure 7: Analysis of the Stability of Turnover using the Lorenz Curve

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0 10 20 30 40 50 60 70 80 90 100

Cum

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Line of Zero Dispersion 2013 2012 2011 2010

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Line of Zero Dispersion 2010 2011 2012 2013

CHART B: Cumulative % Contribution of Turnover by Companies: 2010 to 2013

CHART A: Cumulative % Frequency of Turnover: 2010 to 2013

Source: BSE

7.AscanbeseenfromChartBofFigure7thecontributiontoturnoverbycompanieswasmarginallymoreevenlydistributedin2013,incomparisontopreviousyears.AlthoughtheFinancial

Services sector continues to be the dominant sector in thisregarditisnoted,thattheturnovercontributedbyothersectorssuchasBankingandRetail&Wholesalinghasimprovedin2013.

CumulativeFreq

uenc

y(%

)Cu

mulative%ofTurno

ver

CumulativeTurnover(%)

Cumulative%ofNumberofCompanies

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Figure8depictsthetrend inaveragedaily turnoveroverthemediumand long term.For thepurposeof this analysis, themedium term trendwas defined as the period 2005 to 2013whereasthelongtermwasdefinedastheperiod2000to2013.

The results as presented in Chart A of Figure 8 show thatthe average daily turnover of P9.3 Mn achieved in 2013 haspositively impacted the medium term trend by shifting thetrendupwards.As canbe seen fromChartAof Figure 8, the

Figure 8: Analysis of Medium and Long Term Average Daily Turnover TrendCHART A: Medium Term Trend of Average Daily Turnover: 205-2012 compared with 2005

CHART B: Long Term Trend of Average Daily Turnover: 2000-2012 compared with 2000-2013

Source: BSE

y  =  2E-­‐100e0.1148x  R²  =  0.64243  

y  =  1E-­‐111e0.1278x  R²  =  0.6527  

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P' M

n)

Year

Long Term Trend for the Period 2000 to 2012 Long Term Trend for the Period 2000 to 2013

y  =  6E-­‐138e0.1578x  R²  =  0.63123  

y  =  2E-­‐165e0.1893x  R²  =  0.68239  

0.0

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Averag

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ver(P’Mn)

Averag

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ver(P’Mn)

Year

Year

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forecast turnover for 2013 using the trend computed for theperiod2005to2012isP5.9MnincomparisontotheP7.0Mnasperthetrendcomputedfortheperiod2005to2013.Over the longterm, theaveragedaily turnoverof P9.3Mn in2013hasresultedinashiftinthetrendfromP5MnperdaytoP5.6Mnperday.

In order tomaintain the upwardmomentum of themediumtermtrendanaveragedailyturnoverofatleastP8.4Mnperdaywillneedtobeachievedin2014.

InordertosustainthelongtermtrendanaverageturnoverofP6.3Mnperday,attheminimum,willneedtobeachievedin2014.

Source: BSE

Figure 9: Average Daily Turnover Trend Analysis: Pre and Post Financial Crisis

CHART A: Average Daily Turnover and Trend: 2005 to 2008

CHART B: Average Daily Turnover and Trend: 2009 to 2013

Averag

eDailyTurno

ver(P’Mn)

Averag

eDailyTurno

ver(P’Mn)

Year

y=0.3095x+0.109R2=0.7943

Year

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005

6.0

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y=0.3181x+1.4462R2=0.3658

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2009 2010 2011 2012 2013

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ChartAof Figure9presents the analysisof the averagedailyturnover on a quarterly basis from 2005 to the start of thefinancialcrisisin2008.Thequarterlyturnovertrendduringthepost-financialcrisisperiodisshowninChartBofFigure9.

AscanbeseenfromChartsAandBofFigure9thegrowthinaveragedailyturnoveronaquarterlybasiswasmorestableandconsistentinthepre-financialcrisisperiod.Thisisdepictedbytheclosenessofthedistribution ofturnovertothetrendline

Figure 10: Analysis of Average Daily Turnover and Monthly Contribution to Turnover

CHART A: Yearly Average Daily Turnover Distribution: 2009-2013

CHART B: Quarterly Average Daily Turnover Distribution: 2012-2013

CHART C: Monthly Average Daily Turnover Distribution (P’Mn): 2011-2013

Source: BSE

0

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FEB

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Average Daily Turnover Median Turnover

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( tim

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over

( P'

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Average Daily turnover Median Turnover Mean to Median Ratio

Turnov

er(P

’Mn)

Mean-to-M

edianRa

tio(tim

es)

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er(P

’Mn)

Mean-to-M

edianRa

tio(tim

es)

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and by the higher coefficient of determination or R-squared.Essentially,therandomnessofturnoverwasminimalinthepre-financialcrisisperiod.

The post-financial crisis periodwas characterized by a highlydisperseddistributionofquarterlyturnover,especiallyasfromQuarter2of2011.

From this period up to Quarter 1 of 2013 turnover remainedbelowthetrendline.MoreevidentrecoverybeganinQuarter2of2013.

Figure10depictsthedistributionofturnoverasmeasuredbythemeanandmedianturnover.Thefigurealsoshowsthestabilityofturnoverasmeasuredbythemeantomedianturnoverratio.Generally,thevariationbetweenthemeanturnoverandmedianturnoverhasnarrowedovertheyears,implyingthatstabilityhasindeedimproved.

Ascanbenoted,themeantomedianturnoverratiohasbeenonadownwardtrendsince2011reachingitslowestpointin2013.Themeantomedianratio in2013was2.7timescomparedto3.4timesin2012.

The cob-web diagram in Chart C of Figure 10 indicates therandomness of monthly turnover over the past three years.Inorder to sustain the stabilityof turnover it is ideal that thepercentage contribution to turnover remains sticky at levelsthatwouldresembleaweblikeshape.Inthepastthreeyearsitcanbenotedthatmonthlypercentagecontributiontoturnoverhasbeenratherrandomthanuniform.

3.6 Sector Contributions to Liquidity

AscanbeseenfromFigure11theliquidityoftheBSEishighlyconcentratedondomesticcounters.Intermsofthenumberofsharestraded,theFinancialServicessectorwasthemostliquidsectorontheBSEforthefourthyearrunning.Atotalof261.1MnsharesweretradedintheFinancialServicessectorofwhich91.0%weretradesonaccountofLetshego.

Letshego’s overall dominance in terms of shares traded hasgradually reduced over the past years. In 2013, Letshegoaccounted for 33.5% of all shares traded on the DomesticBoardincomparisonto54.7%in2012and68.7%in2011.Thisisapositivedevelopmentasitshowsthatliquidityisgraduallyspreadingacrossdifferentcounters.

Figure 11: Sector Contributions to Liquidity: 2012 and 2013

2012 2013

Turnover/AvgMarketCap(%)

SharesTraded(Mn)

SharesTraded/

AvgSharesListed(%)

Turnover/AvgMarketCap(%)

SharesTraded

(Mn

SharesTraded/

AvgSharesListed(%)

Note1 Note2 Note1 Note2 Note1 Note2 Note1 Note2

DOMESTIC

FinancialServ. 1.26 0.10 229.99 10.18 2.02 0.19 261.1 10.78

Retail 0.37 0.03 50.96 4.04 1.53 0.15 159.3 7.49

Property 0.29 0.02 57.28 5.04 0.45 0.04 100.8 5.71

Banking 0.63 0.05 46.35 1.19 1.54 0.15 133.9 3.38

IT 0.00 0.00 1.53 4.85 0.00 0.00 0.00 0.10

SecurityServ. 0.03 0.00 1.49 3.38 0.01 0.00 0.54 0.68

Tourism 0.02 0.00 4.65 0.92 0.05 0.00 10.5 2.07

Energy 0.02 0.00 1.26 0.79 0.05 0.00 2.37 1.49

FuneralServ. 0.06 0.00 13.32 11.06 0.20 0.02 39.7 32.87

FOREIGN

FinancialServ. 0.00 0.00 0.56 0.01 0.00 0.00 0.00 0.00

Mining 0.00 13.63 2.54 0.07 0.00 0.00 2.13 0.04Note 1: Computed separately for the domestic & foreign board.

Note 2: Computed for all shares listed on the BSE

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Figure 12: Liquidity Indicators Pre & Post ATS Implementation: 2012 - 2013

Pre-ATS Post-ATS 2012 2013

4Jan2012to22Aug2012

24Aug2012to31Dec2012

AverageDailyVolume(Mn) 1.3 2.3 1.7 2.9

AverageDailyTurnover(P’Mn) 2.9 4.9 3.6 9.3

StandardDeviationofTurnover 5.5 8.7 6.9 15.9

CoefficientofVariationofTurnover 1.9 1.8 1.9 1.7

LiquidityRatioNote1 1.4 1.2 2.7 5.8Note 1: Based on Average Domestic Market Cap

Source: BSE

3.7 Impact of the ATS on Liquidity

Arguably the single most important development that hascontributed to an increase in liquidity is the implementationof theATS inAugust2012. Inorder tounderstandthe impacttheATShashadonliquidity,acomparisonwasmadepreandpost theATS implementation.The statistics examined for thispurposearedepictedinFigure12.

As can be noted from Figure 12, the average daily turnoverincreased from P2.9 Mn pre-ATS to P4.9 Mn following theimplementation of the ATS in 2012. Average daily volume ofsharesalsoincreasedfromP1.3Mninthepre-ATSperiodtoP2.3Mnpost-ATSin2012.ThestatisticsdepictedinFigure12for2013

furthersubstantiatesthedeductionthattheimplementationoftheATScontributedsignificantlytoliquidityandalsotostabilityofturnover.

It is noted that the ATS is still in its infancy, having beenimplementedforscarcely16months.Assuch,itisexpectedthattheATS’impactonliquiditywillneedtobeobservedoveralongerperiodbeforeamoreconclusivedeterminationcanbemadeastoitsimpactonliquidity.

3.8 Investor Contribution to Equity Turnover

Localinstitutionalinvestorsaccountedfor59.8%ofturnoverin2013,maintainingtheirdominantpositionfrom2012. In2012

Figure 13: Local Investor Contribution to Turnover Pre & Post ATS Implementation

Pre-ATS Post-ATS 2012 2013

Jan2012toJuly2012

Sep2012toDec2012

AverageDailyTurnover(P’000) 297.0 555.4 382.1 813.0

ContributiontoTurnover(%) 10.4 10.9 10.6 8.7Source: BSE, CSDB

Figure 14: Investor Contribution to Turnover: 2010 to 2013

Investors Turnover(%)2011 Turnover(%)2012 Turnover(%)2013 %ContributiontoLiquidity

ForeignCompanies 46.2 39.0 29.0 1.7

ForeignIndividuals 2.5 2.5 2.2 0.1

LocalIndividuals 5.9 10.6 8.7 0.5

LocalCompanies 44.7 47.5 59.8 3.5

Brokers 0.7 0.3 0.3 0.0

TOTAL 100.0 100.0 100.0 5.9

Source: CSD Botswana

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Figure 15: Investor Contribution to Turnover on a Quarterly Basis

Investors 2012 2013

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

ForeignCompanies 31.0 28.6 47.1 44.8 39.3 24.2 26.4 29.5

ForeignIndividuals 2.4 2.2 3.2 2.4 8.1 1.7 2.4 0.8

LocalIndividuals 7.1 15.3 8.6 10.7 7.1 7.6 3.0 12.9

LocalCompanies 58.8 53.5 40.8 42.0 44.9 66.4 68.0 56.5

Brokers 0.8 0.4 0.3 0.1 0.6 0.1 0.2 0.3

TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: BSE, CSDB

Figure 16: Net Purchases/ (Sales) of the top 5 Counters Contributing to Turnover Analysed by Investor Category (P’ Mn): 2013

Investors Quarter1 Quarter2 Quarter3 Quarter4 2013

Brokers 0.88 0.05 0.46 (0.55) 0.84

ForeignIndividuals (29.75) (10.36) (0.75) (6.58) (47.44)

ForeignCompanies 65.21 167.10 39.93 292.42 564.66

LocalIndividuals (15.27) (34.68) (5.80) (184.43) (240.18)

LocalCompanies (21.08) (122.10) (33.83) (100.86) (277.87)Source: BSE, CSDB

local institutional investors contributed 47.5% to turnoverfrom44.7% in 2011. Local individual contribution to turnoverin2013was8.7%.Participationbylocalindividualinvestorshasincreasednearly threefoldover thepastfiveyears from3% in2008to8.7%in2013.

Overthepastthreeyears,localindividualinvestorcontributionto turnover has averaged 8.4%. The growth in retail investorparticipation is awelcome indication of financial inclusion ofcitizens in theeconomyof thecountry.However,Botswana isstillwaybehindcountriessuchasMauritiusandAsianEmergingMarketsifacomparisonwastobemadeofindividualinvestorparticipation intheCapitalMarket.Themainreasonforthis isthelackoffinancialawarenessandopportunitiesforinvestment.Although,institutionalinvestorsstill“crowd-out”retailinvestorsin periods of rising liquidity, the BSE is happy to note thatturnover generatedby individual citizens, inmonetary terms,increasedsignificantlyintheyearunderreviewrelativeto2012.Thisisanindicationofincreasedparticipationoflocalindividualcitizensinthestockmarket.

In 2013, local individual investments in the BSE more thandoubled and totalled P201.7 Mn as measured by theircontributiontoturnover,anincreaseof111.4%incomparisonto2012.

AnanalysisofinvestorcontributiontoturnoveronaquarterlybasisisshowninFigure15.

AscanbeseenfromFigure15,foreigncompanyparticipationinBSEtradingactivityincreasedto29.5%inQuarter4showingasteadyimprovementinparticipationfromQuarters2and3.Thelocalcompanycontributionwasdominant inall fourQuartersof2013.

Figure 16 below analyses turnover generated from the top5 traded companies in 2013 and investor contribution totransactions.ThesecompanieswereLetshego,Choppies,FNBB,BIHL and Sechaba. The analysis presents the net purchaseswhere net purchases is defined as total purchases less totalsales.

Theanalysisindicatesthatthe5companiesattractedsignificantforeigninvestor interest in2013asforeignerswerenetbuyersof these domestic companies. Further analysis shows that93.0%(P564.7Mn)oftheforeigncompanies’netpurchaseswereconcentratedonthese5companies.Intotal,foreigncompaniesspentanetP42.6MnbuyingotherstocksotherthanLetshego,Choppies, FNBB, BIHL and Sechaba. On the other hand, localinstitutionalinvestorswereactiveacrossalllistedcounters.

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Note: The contribution to turnover in 2012 is indicated in parenthesis

Source: CSD Botswana

CHOBE:0.0%(0.0%)

NGAMILAND:0.1%(1.4%)

NORTH-EAST:0.1%(0.6%)

GHANZI:0.1%(0.5%)

FRANCISTOWN:0.8%(2.2%)

GABORONE:86.2%(73.8%)

KGATLENG:3.9%(3.5%)

KGALAGADI:0.2%(0.4%)

KWENENG:1.2%(3.3%)

CENTRAL:1.4%(4.0%)

SELIBE-PHIKWE:1.5%(4.9%)

SOUTH-EAST:3.6%(1.9%)

SOUTHERN:0.8%(3.6%)

Figure 17: Retail Investor (Resident in Botswana) Contribution to Turnover by Districts in Botswana: 2012 and 2013

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FRANCISTOWN:0.8%(2.2%)

3.9 Geographical Distribution of Retail Investor Turnover

Figure 17 shows the distribution of retail investor turnoveranalysedacrossdistrictsinBotswana.Turnoverformajortownsis shown separately to avoid distortion of total turnover bydistrictinwhichthesetownsarelocated.

AscanbeseenfromFigures17and18theareasinSouth-EastBotswana, recorded a growth in contribution to turnover in2013. Investors from Gaborone, Kgatleng and the South-EastDistrictscontributedincreasinglytoturnoverin2013from2012.Thiscontinuestosupporttheconclusionthatturnoverismoreconcentrated in the Southern and Eastern parts of Botswanawhichcomprisemoreeconomicactivityinsemi-urbanvillagesrelativetotheotherdistrictsinBotswana.

AsnotedinSection10.2ofthisreview,theBSEhascontinuedto engage in market development activities in various partsof Botswana, with a view to creating greater awareness andimproving financial literacy. Market development initiativeshavebeencarriedouteveninareaswithrelativelylesseconomicactivity.The BSE is confident that in the long run, deepeningfinancialawarenesswill translate into increased retail investorparticipation in the capital market, and thus justify theinvestmentinbothtimeandresourcesexpendedbytheBSEto“reachout”toinvestors.

Figure 18: Retail Investor Contribution to Turnover by District: 2012 and 2013

District 2012 2013

Turnover(P’Mn) Turnover(P’Mn) %Change

Gaborone 70.328 168.818 140.0

Selibe-Phikwe 4.689 2.991 (36.2)

Francistown 2.100 1.602 (23.7)

Southern 3.434 1.628 (52.6)

Kgatleng 3.303 7.584 129.6

SouthEast 1.774 6.972 293.1

Kweneng 3.175 2.366 (25.5)

Central 3.803 2.835 (25.5)

NorthEast 0.555 0.093 (83.2)

Chobe 0.018 0.091 405.6

Ngamiland 1.301 0.290 (77.7)

Ghanzi 0.480 0.109 (77.3)

Kgalagadi 0.364 0.466 28.0

Note: Turnover by local individual investors resident outside Botswana was P0.091 Mn and P5.845 Mn in 2012 and 2013 respectively

Source: CSD Botswana

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4.1 Global ETF Landscape

AccordingtoBlackRock’s“ETPLandscape”,anExchangeTradedProduct (ETP) Research Report, (December 2013), the globalETPindustrycontinuedtogrowin2013asinvestorscontinuedto seekefficient, tailormade instruments toaccessdiversifiedmarketsandinvestments.InvestmentallocationtoETPsgloballyhasoutstrippedtheallocation tomutual funds.Thishasbeenattributed to increased investment by institutional investors,growth in retail markets and continued innovation that offerinvestorsaplethoraofrisk-returnoptions.

Globally,GoldETPsexperiencedsignificantoutflowsin2013asthepriceofGold fell from its2012peakand investors turnedto other asset classes formore attractive returns. Contrary totheglobaltrendtheBSE’srecordsindicatenetinflowsintotheNewGoldETFin2013.Thisisevidencedbyanincreaseof1.5MnunitsoftheNewGoldETFintheBotswanaregister.

TheBSElistedtheNewGoldETFinJuly2010andsubsequentlylisted the BettaBeta ETF in May 2011. Both securities areprimarilylistedontheJSE.

4.2 Performance of the NewGold ETF

TheGoldBullionpriceintheLondonmarketreacheditshighestprice for 2013 of US$ 1,693.75 per ounce on 2 January 2013.Consequently,theNetAssetValue(NAV)oftheNewGoldETFinUSDollartermsalsoreacheditsall-timehighonthesamedate.Thepriceof theNewGoldETFon theBSE reached itshighestpointofP130.30perunitfor2013on7Februaryafteralagof26marketdays.

ThepriceofGolddeclinedgraduallyfromits2013hightoclosetheyearwithadepreciationof27.8%.TheNAVandpriceontheBSEinPulatermsoftheNewGoldETFdepreciatedby19.1%and17.2%in2013respectively.

ThedifferenceinthedepreciationoftheBSEpriceof17.2%andthedecreaseintheNAV(inPulaterms)of19.1%asatend

December2013wasprimarilyduetothemannerinwhichtheBSEdeterminesclosingprice,whichisdefinedasthelasttradedprice.Assuch,thedifferencebetweentheBSEpriceandtheNAV

(inPulaterms)canbematerialwhentherearenotradesonagivendate.However,ondaysthattheNewGoldETFtradedthecorrelationbetweentheNAVandthetradedpricewas99.4%in2013comparedto98.9%in2012.ThedifferencebetweentheNAVandpriceinPulatermsisduetomanagementfees.ThisisillustratedinFigure19.

TheNAV(inPulaterms)onagivendateiscomputedusingtheNAV(inUSDollarterms)andtakingintoaccounttheexchangeratebetweenthePulaandtheUSDollaronsuchdates.TheNAV(inUSDollar terms) isderived fromtheUSDollarpriceof theGoldBullionintheLondonmarket.AsexplainedinpastreviewsadepreciationofthePulaagainsttheUSDollarwillpositivelyimpact the price of the NewGold ETF. Hence, investments intheNewGoldETFcanbeusedasanindirecthedgeagainstthedepreciationofthePulaincomparisontoUSDollar.

ChartAofFigure20indicatesthattheNAVoftheNewGoldETFin Pula terms outperformed the NAV of the ETF in US Dollarterms in 2013. In 2013, the NAV (in Pula terms) appreciatedstronglyagainsttheNAVinUSDollarterms.TheappreciationoftheNAV(inPulaterms)isattributedtothedepreciationofthePulaagainsttheUSDollarby10.8%in2013.

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Figure 19: Performance of the NewGold ETF on the BSE and the NAV of the NewGold ETF (BWP)

Note: The graph is based only on dates on which the NewGold ETF tradedSource: BSE, Absa Capital

4. THE EXCHANGE TRADED FUND (ETF) MARKET

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Figure 20: Performance of the NAVs of NewGold ETF against the Gold Bullion

Source: BSE and Absa Capital

Chart A: NewGold ETF NAV (BWP & US$ Terms): 2013

Chart B: NewGold ETF NAV (US$) and the London Gold Price (US$): 2013

AssuchtheoveralldepreciationoftheNAVoftheNewGoldETFby19.1%inPulatermsincomparisontoadepreciationof28.1%inUSDollartermsislargelyattributabletothedepreciationofthePulaagainsttheUSDollarby10.8%in2013.

SincetheNAV(inUS$terms)oftheETFisderivedfromtheUSDollarpriceoftheGoldBullionandgiventhattheNAVofGoldhada100%correlationtothepriceofGoldasdepictedinChartBofFigures20thedifferencebetweenthetwoisattributedtomanagementfees.

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TheBettaBetaETFreacheditshighestpricesincelistingontheBSE,ofP40.60perunit,on24October2013.Thisrepresentedanappreciationof23.2%onitslistingpriceofP32.95inMay2011.

Attheendof2013,thepriceoftheBettaBetaETFhaddepreciatedby5.6%ontheBSEincomparisontoadepreciationof2.7%ofitsNAV(inPulaterms)asindicatedinChartAofFigure21.

ChartBofFigure21depictstheperformanceoftheBSEpriceoftheBettaBetaETFandtheNAVinBWP.ItcanbeseenthatthepriceoftheBettaBetaETFontheBSEiscloselycorrelatedwiththeNAVofthesameinPulatermsonthedaysonwhichtheETFhadtraded.

CHART A: Performance of BettaBetta ETF NAV and BSE Price

CHART B: Performance of BettaBetta ETF NAV (BWP) and BSE Price

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Figure 21: Performance of the BettaBeta ETF NAV and BSE Price: 2013

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4.3 Performance of the BettaBeta ETF

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Figure 22: Performance of the BettaBeta ETF NAVs and the selected indices: 2013

CHART B: Performance of the BettaBeta ETF NAV (BWP and ZAR)

CHART A: Performance of BettaBetta ETF (BSE Price), the JSE Top40 Index (BWP) and the BBEQWT 40 Index (BWP)

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Thecorrelationbetween the two setsofdata is 94.8%,whichindicatesthehighefficiencyinpricediscoveryondaysthattheBettaBetaETFistradedontheBSE.

ThedifferencebetweentheNAVandpricecanbeattributedtomanagementfees.

It isnotedthatthepriceof theBettaBetaETFontheBSEalsounderperformedtheJSETop40IndexandtheBBEQWT40IndexwhentheperformanceofthetwoindicesarecomparedinPulatermsascanbeseeninChartAofFigure22.

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TheNAVoftheBettaBetaETFisquotedinSouthAfricanRands(ZAR) on the JSE.Hence, the appreciationof the Pula againsttheRandwillnegativelyaffecttheNAVoftheETFinPulatermswhich is computed taking into account the exchange ratebetweenthePulaandtheRand.

The difference between the depreciation of the NAV (in Pulaterms)of2.7%incomparisontoanappreciationinRandtermsof 7.5% is largely explained by the appreciation of the PulaagainsttheRand.In2013thePulaappreciatedby9.7%againsttheZAR.

Figure23detailsthequarterlydividendspaidbytheBettaBetaETFin2013.ThedividendpayoutsontheETFareduetotheETFreceivingdividendsfromtheunderlyingsecuritiesbackingtheETF.The BettaBeta ETF is an investmentwhich provides bothincome and capital returns to its unit holders. The dividendpayouttranslatesintoanestimatednetdividendyieldof2.3%

basedontheaveragepriceofP38.25perunitin2013.

Figure 23: Dividends Paid by the BettaBeta ETF in 2013

Quarter Dividends(Thebe)

EndofMarch2013 22.99

EndofJune2013 17.59

EndofSeptember2013 30.62

EndofDecember2013 15.61

TOTAL 86.81Source: Nedbank Capital

If the dividend pay-out is taken into account it is estimatedthat theBettaBetaETFwouldhavegiven investorsa returnofnegative3.2%onatotalreturnbasisin2013incomparisontoanegativereturnof5.6%ifonlycapitalgainsareaccountedfor.

Figure 24: Efficiency of Price Discovery Based on Traded Prices

Company 2011 2012 2013

MPD(P) MPD/Avg.Price(%)

MPD(P) MPD/Avg.Price(%)

MPD(P) MPD/Avg.Price(%)

NewGoldETF 1.14 1.08 0.93 0.76 0.85 0.74

BettaBetaETF 0.37 1.16 0.36 1.00 0.38 1.00Source: BSE, I Net Bridge

4.4 Liquidity and Efficiency of Price Discovery in the ETF Market

ETFshaveadvantagesthatarenotexperiencedwithequitiesatthepresentmoment.Themarket-makingmodel,whichmakesit easier for investors to access ETFs without facing liquidityconstraints, and the highly competitive transaction costs aresomeoftheattractivefeaturesofETFs.

BoththeNewGoldandtheBettaBetaETFshavebeenawardedLocal Asset Status. As such pension fund managers, withstringent weight allocations between domestic and foreignassets, canallocateaportionof thedomesticportfolio to theNewGoldandtheBettaBetaETFs,whicharebackedbyforeignsecurities,withoutviolatingtheirallocationguidelines.

The efficient price discovery in ETFs can be attributed to themarket-makingmodelwhichhas ensured these securities arehighly liquid andhighly accessible to investors.The extentofthepriceefficiencyinETFsoveraperiodof3yearsisdepictedin Figure 24. This has been computed using the Mean PriceDifferential(MPD)andMPDrelativetoaveragepriceoftheETFsintheJSE,whichistheprimarymarket.

AscanbeseenfromFigure24andifacomparisonweretobemadewithotherduallistedsecuritiesasdetailedinFigure27,theefficiencyofpricediscoveryofthe2ETFslistedontheBSEexceedsthatoftheothersecuritiesbyfar.

Despite these advantages it has been noted that investorinterest inETFs,especiallytheBettaBetaETF, is lowandthis ismainlyduetoassetmanagersnotmakingsignificantallocationstoETFsintheirportfolios.Ithasbeenbroughttotheattentionof the BSE that asset managers do not include ETFs in theirlocalportfolioholdingsbecauseunlikedomesticequities, theperformance of which is benchmarked by the DCI and otherindices,ETFsdonothaveadomesticbenchmarkeventhoughboththeNewGoldandBettaBetaETFshavebeenawardedLocalAssetStatus.

TheBSEisconsideringincludingtheETFsintheLASIandLASFFItoaddresstheissue.Thisstepwillbetakeninconsultationwithpensionfundsandassetmanagers.

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In order to improve the liquidity in ETFs, BSE and NedbankCapital,issuersoftheBettaBetaETFconductedanETFseminaron23May2013 toeducate and sensitizemarketparticipantsespeciallybrokersandbusinessjournalistsaboutETFs.TheBSEwillcontinuetoeducatethepublicaboutETFsandtheiruseinan investment portfolio, with a view to improving awarenessandpromotingturnoverinETFs.

As noted earlier, turnover in the NewGold ETF improvedsignificantlyin2013relativeto2012.TheNewGoldETFtraded1.2MnunitsforavalueofP131.2Mn,incomparisonto223,026unitswithavalueofP27.6Mnin2012.TheETFwastradedatpricesrangingbetweenP100.50andP130.30perunit.Arecord2.3MnunitswereheldintheBotswanaregisterasattheendof2013,thehighestnumberofunitssincetheNewGoldETFwas

listedontheBSE inJuly2010.This increasedcreationofunitsunderpinnedtheproportionateincreaseinvolumeandinflowsin2013.

Incontrast to theNewGoldETF the turnoverof theBettaBetaETFwasthelowestsincebeinglistedontheBSE.TheBettaBetaETF traded 20,519 units at prices ranging from P33.55 andP40.60perunit.

TurnoverandliquidityintheETFmarketisdetailedinFigure25.

Figure 26 shows investors’ contribution to ETF turnover for2013onaquarterlybasis.ActivityintheETFmarketwasmostlydrivenbylocalfundmanagers,whowerenetbuyersofETFsin2013,withtheparticipationbyotherinvestorsbeingminimal.

Figure 26: Investors Contribution on a Quarterly basis (%): 2013

Quarter1 Quarter2 Quarter3 Quarter4 2013

ForeignCompanies 0.0 0.0 0.0 0.0 0.0

ForeignIndividuals 0.1 0.0 0.1 1.1 0.1

LocalIndividuals 3.3 0.2 0.4 0.7 0.3

LocalCompanies 46.6 49.9 49.7 48.3 49.6

Brokers 0.4 0.0 0.0 0.0 0.0

MarketMakers 49.6 49.9 49.7 49.9 49.9

TOTAL 100.0 100.0 100.0 100.0 100.0Source: BSE, Nedbank, Absa Capital

Figure 25: Turnover of Exchange Traded Funds in 2013

Quarter1 Quarter2 Quarter3 Quarter4 TOTAL

NewGold ETF

Turnover(P) 3,958,880 104,182,200 13,217,394 9,816,525 131,174,999

AverageDailyTurnover(P) 64,900 1,680,358 213,184 155,818 528,931

No.ofUnitsTraded 31,681 908,570 121,737 94,567 1,156,555

BettaBeta ETF

Turnover(P) 157,206 332,480 143,578 141,625 774,890

AverageDailyTurnover(P) 2,577 5,363 2,316 2,248 3,125

No.ofUnitsTraded 4,018 8,966 3,897 3,638 20,519

TotalNo.ofETFDeals 56 61 58 31 206Source: BSE

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Thedeviationbetweenthepricesofduallistedstocksquotedintheprimarymarketandthosequotedinthesecondarymarketcanbeusedtogaugeefficiencyinpricediscoveryofduallistedcounters.Theinefficiencyinpricediscoveryofduallistedstocksin theBSE is toa largerextenta functionof low liquidity.TheMeanPriceDifferential(MPD)andMPDrelativetoaverageprice

ofthesecuritycanbeusedtoanalysetheextenttowhichpricesin the BSE reflect prices in the primary market. A low MPDindicatesefficientpricediscovery.

ThecomputationofMPDandMPDasapercentageofpriceisdetailedinFigure27.

2011 2012 2013

MPD(P) MPD/Avg.Price(%)

MPD(P) MPD/Avg.Price(%)

MPD(P) MPD/Avg.Price(%)

AngloAmerican 16.17 5.30 4.21 1.78 N/A N/A

AfricanCopper 0.12 51.10 0.05 15.63 0.07 36.80

FirestoneDiamonds 0.54 20.96 0.58 32.67 0.11 18.84

LucaraDiamonds 0.43 6.69 0.24 3.70 1.55 18.74

A-CapResources 0.58 20.54 0.17 12.36 0.18 21.07

AfricanEnergy 3.61 150.53 0.56 20.81 0.08 13.35

GalaneGold N/A N/A 0.52 7.12 5.84 79.41

BlueFin.Services 0.04 10.18 0.04 8.62 0.23 56.57

InvestecLtd 5.47 10.23 N/A N/A N/A N/A

DiscoveryMetals 0.38 4.33 0.42 3.71 0.42 10.34

Source: BSE, I Net Bridge

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5. INEFFICIENCY IN PRICE DISCOVERY OF DUAL LISTED STOCKS

Figure 28: BSE FCI Compared to FCI based on Prices from Primary Markets: 2010 – 2013

Source: BSE, Reuters, ASX

Figure 27: Efficiency in Price Discovery Based on Traded Prices Company

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It canbenoted fromFigure27 thatover theyearsdual listedsecuritiesintheBSEwiththeexceptionofETFs,haveexhibitedinefficienciesinpricediscovery.ThisisevidentfromtheMPDsoftheduallistedsecuritiesbothinabsolutetermsandrelativetopricedetailedinFigure27.

A challengeemanating from this situation is that the ForeignCompany Index (FCI)whichtracks theperformanceof foreignstocks listed on the BSE consequently becomes inefficient inmeasuringperformanceofthereturnsofduallistedcompanies,giventhemethodologyusedtocomputetheFCI.

TheFCI iscomputedusingtheclosingpriceof thedual listedsecurities as traded on the BSE. Hence, low liquidity andinefficient price discovery have a direct influence on thecomputationoftheFCI.Ifacomponentsecurityhasnottradedon the BSE for some time, its last closing price is unlikely torepresent itsvalueandhencewill lead to inefficiencies in thecalculationoftheFCI,FRSIandLASI.

AscanbenotedfromFigures28and29,theBSE’sFCIisindeedaninefficientrepresentationofpricemovementsofitsconstituentstocks,themajorityofwhichareminingstocks.Ascanbeseen,theFCIcomputedusingBSE’sclosingpricesmovesin“fitsandstarts”andhasaweakcorrelationwiththeFCIbasedonprimarymarketprices.ThisisinstarkcontrasttotheETFslistedontheBSE.

InordertoimprovetheefficiencyoftheFCItheBSEisconsideringthefollowingstrategies;a) Introducingmarket-makersforduallistedsecurities. ThedraftListingRulesduetobeimplementedin Quarter4of2014addressestheissue.

b) Redefiningclosingpricesbasedontheclosingprices intheprimarymarket.c) Makinglocalinvestorsandbrokersawareofthe intricaciesofinvestinginforeignsecuritiesduallisted ontheBSEinordertominimizeopportunitiesfor arbitrage.

As stated earlier, the largest constituent of the FCI are theMining&Mineralstocks.EventhoughmarketcapitalizationofMining & Mineral sector companies is significant, liquidity inthesecountersisnon-existent,asdetailedinFigure29.

Accordingtotheresultsofthe2012/2013FraserInstituteGlobalMining Survey, Botswanawas once again the highest rankedAfricanminingcountryinoverallminingattractiveness.Globally,Botswanawasrankedthe7thattractiveminingaddressintheworld.

The BSE plays host to a wide range of mining explorationcompanieswhoarebenefitingfromtheconduciveenvironmentafforded by Botswana. By extension, the BSE can be viewedasaminingdominantstockexchangegivenitstrackrecordinattractingmultipledual listings fromforeignstockexchanges.These listings however have not helped to promote citizenparticipation in themining sector,mainlydue to the liquidityinthesesecuritiesandthelackofawarenessoflocalinvestors,analysts and brokers of the intricacies of investing inminingcompanies.

Figure 29: Relative Performance of Mining Companies listed on the BSE

2011 2012 2013

GDPfromMining(P’Mn) 25,841.00 22,011.90 30,829.80

ContributiontoGDP(%) 24.7 19.9 22.4

MarketCapofMiningCompaniesonBSE(P’Mn) 357,293.96 362,304.27 365,754.65

MiningGDPtoMiningCompaniesMarketCap(%) 7.1 6.1 7.8

Turnover/MarketCapofMiningCompanies(%) 0.00 0.00 0.00Source: BSE, Statistics Botswana

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The BSE launched 3 bond indices in April 2013 in responseto a request from members of the Botswana Bond MarketAssociation.Thesewere;GovI–agovernmentbondindex,CorpI–acorporatebondindexandtheBBIwhichisacompositeindexcomprisingbothgovernmentandcorporatebonds.

TheGovIandtheCorpIareequallyweightedindicescomputedonatotalreturnbasis.ConstituentbondsintheCorpIandGovIare weighted equally rather than on a market capitalizationor liquidity basis as done in the computation of BSE’s equityindices.

This was done taking into account the need for the indicesto better represent market movements given the low levelof liquidity in almost all the constituent securities.The BBI iscomputedasthemeanoftheGovIandCorpI.Theperformanceoftheindicesandthemovementininflationfor2013isdetailedinFigure30.

Much like equity indices computed by the BSE, the bondindiceswillassistfundmanagerstobenchmarkreturnsofbondportfolios against the indices. Further, itwould help promoteinvestmentinstrumentssuchasbondindexfundsandETFs.

Inresponsetodeclining inflation,theBankofBotswana(BoB)MonetaryPolicyCommittee(MPC)cuttheBankrateby50basispoints(0.50%)eachtimeon2May,18June,13Augustand10December 2013. Overall, this reduced the Bank rate to 7.5%from9.5%sincethepreviousratecutinDecember2010.

Bond indices experienced an upward movement in 2013reflecting the significant downward adjustment in yieldsfollowingthefourratecuts.Consequently,theBBIregisteredareturnof10.3%,whilst theCorpIandtheGovIappreciatedby9.6%and10.9%respectively in2013.ReturnsonboththeBBIandtheGovIoutperformedinflationfor2013whichwas4.1%.

6. BOND MARKET PERFORMANCE

6.1 Botswana Bond Index Series

Source: BSE

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Figure 31: Quarterly Analysis of Bond Trades: 2013

Quarter1 Quarter2 Quarter3 Quarter4

Value(P’Mn)

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Value(P’Mn)

BW003 5.3 7.4 0.3 -

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BW007 1.7 22.9 12.1 1.8

BW008 3.6 0.3 - 15.0

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TOTAL 33.4 31.7 12.8 16.8Source: BSE

Debt market turnover decreased substantially in 2013 whencomparedto2012.Thetotalvalueofdebt instrumentstradedin 2013 amounted to P94.7 Mn, compared to P332.2 Mn in2012. The total debt market turnover was accounted for bygovernment bonds. A quarterly analysis of debt turnoverindicatesthatactivitywascomparativelyhighinQuarters1and2of2013.

ThedeclineinturnovertookplaceinayearinwhichtheBSEtooksignificant steps to develop the bond market. Unfortunately,some initiativescouldnotbe implementedsincetherequiredapprovals have not been received. The BSE is confident thattheseinitiativeswillcometofruitioninduecourseandimproveliquidityofdebtinstruments.

6.3 Debt Market Capitalisation and Issuer Profile

The totalnumberofbonds listedon theBSEasat theendof2013stoodat35,unchangedfrom2012.Figure32belowdetailsthegrowthofthedebtmarketcapitalisationanalysedbyissuerprofilesince2009.

ThetotalnominaldebtmarketcapitalisationofthebondslistedontheBSEamountedtoP9.3Bnin2013incomparisontoP8.5Bnin2012.

ThemarginalincreaseinmarketcapitalisationisattributabletoanetissueofP766Mningovernmentandcorporatebonds.

6.2 Debt Market Turnover

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Figure 32: Debt Market Capitalisation (Nominal Values) by Issuer Category: 2009 to 2013

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The BSE’s P/E ratio closed the year at

in comparison to 9.2 times in 2012.

11.5 times

REACHING NEW HEIGHTS

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7. MARKET INDICATORS

7.1 Indicators of Value

CommonlyusedindicatorsofvalueinastockmarketincludethePrice-to-Earnings (P/E) ratio, DividendYield and Price-to-BookValueratio.

AsmuchasaP/Eratiocanbecomputedforanindividualshare,itcanalsobecomputedforthemarketasawhole.TheP/Eratiofor themarket is computed by dividingmarket capitalisationby totalearnings (profits)of listedcompanies.As canbe seenfromFigure33,themarketP/EratiooftheBSEincreasedin2013followingthreeyearsofsteadydeclinesince2009,reflectingtheappreciationofsharepricesincomparisontoearnings.TheBSE’sP/Eratioclosedtheyearat11.5timesincomparisonto9.2timesin2012.

Intandemwiththerise intheP/Eratio, theDividendYield forthemarketdecreased to4.1% in2013 from4.9% in2012.Thedecrease inDividendYield isdirectlyrelatedtothe increase insharepricesasevidentfromtheseveralindicescomputedbytheBSE.ThePrice-to-BookValueratioincreasedsteadilyto2.7timesforthesamereason.

Changesinmarketindicatorscouldreflectoneoftwounderlyingreasons; that the market is overheated or that it has morepotentialtocreatevalueforinvestors.

As at the end of 2013, the BSE’s P/E ratiowas below its longterm(10year)average,indicatingthatinvestorsarepayinglessfor earnings than theywerepayingover thepast 10 yearsonaverage.

All in all, theBSE isof theview that theappreciation in shareprices in recent years is due to the gradual recovery of themarketfromthefinancialcrisisin2008.

As can be seen from Figure 37, the BSE’s P/E multiple is stillthe lowest in comparison to the JSE and theSEMwhich is anadvantage to attract foreign portfolio investment to the BSEprovidedliquiditycanbeimproved.

Figure 33: Market Indicators for Domestic Companies Listed on the BSE: 2009 to 2013

DomesticCompanies 2009 2010 2011 2012 2013 10YRAVG

Marketindicators

P/ERatio(times) 13.5 10.8 10.2 9.2 11.5 12.1

DividendYield(%) 4.3 4.9 5.2 4.9 4.1 5.0

Price/BookValue(times) 4.8 3.9 2.8 2.5 2.7 5.4Note: The statistics are based on the most recent audited financial statements

Source: BSE

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TherelativesizeofdomesticcompanieslistedontheBSEcontinuedtoimprovein2013.TheBSE’sdomesticmarketcapitalisationforequitywasP43.5Bnasattheendof2013,anincreaseof22.3%incomparisontoP35.5Bnin2012.

Thesizeofdomesticcompaniesrelativetothesizeoftheeconomy,indicatedbytheratioofmarketcapitalisationtoGDP,alsoincreasedin2013to33.6%from30.8%in2012.

Figure 34: Market Capitalization and Relative Performance: 2009 to 2013

2009 2010 2011 2012 2013

Market Capitalisation

DomesticCompanies(P’Mn) 28,536.2 26,245.7 30,694.3 35,530.8 43,457.6

ForeignCompanies(P’Mn) 346,001.1 408,380.3 380,909.5 376,818.2 373,132.8

Total (P’Mn) 374,537.2 434,626.0 411,603.8 412,349.0 416,590.4

Relative Performance

DomesticMarketCap/GDP(%) 38.0 33.1 28.8 30.8 33.6

Turnover/DomesticCoMarketCap(%) 2.7 3.5 3.5 2.7 5.9

Turnover/AllCoMarketCap(%) 0.2 0.2 0.2 0.2 0.6

Note 1: Computed using average domestic market capitalisation, average total market capitalisation and average annual GDP (at current prices) subsequent to the rebasing of economic statistics by Statistics BotswanaSource: BSE, Statistics Botswana

As depicted in Figure 35, the increase in the BSE’s domesticequity market capitalisation is attributed to the cumulativeimpactofapriceeffectof20.6%andaquantityeffectof1.8%.Thisisnotsurprisingas2013wascharacterisedbyrapidgrowthinsharepricesandnomajorcorporateactionsthatresultedinsignificantshareissues.

As canbe seen in Figure 35, the price effect outweighed thequantity effect and contributed 92.1% of the percentagechange inmarketcapitalisation in2013. In2012, thequantityeffectwasmarginally higher than the price effectwhereas in2011theoppositetookplace.

7.3 Price Changes for Domestic Companies

In 2013, most listed companies experienced movements intheirshareprices.Figure36showsthatpricesof18companiesappreciatedwhereas 5 companies recorded declines in shareprices.Thisshowsanimprovementinsharepriceperformancein comparison to 2012 where the prices of 15 companiesappreciatedwhilstthoseof7companiesdeclined.

The Property sector ended the year with all constituentstocks recordinggains in shareprices, except forNewAfricanProperties (NAP) whose share price remained unchanged.Sefalana doubled its share price to record the largest gain of107.1%in2013.Itisnotedthatin2012thehighestgainerwasChoppieswhosesharepriceappreciatedby78.3%.

7.2 Equity Market Capitalisation

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Figure 35: Price and Quantity Effect on the Growth of Domestic Market Capitalisation for Equity: 2007 to 2013

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Figure 36: Price Changes of the Domestic Companies: 2013

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Figure 37: Comparative Performance with Other SADC Stock Exchanges: 2012 and 2013

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8. COMPARISON WITH SELECTED MARKETS8.1 Relative Valuations

Asreferredtoearlierinthereport,BSE’sPrice-to-EarningsRatio(P/ERatio)closed2013at11.5times,belowthatoftheJSEandSEM.TheP/ERatiosofboththeJSEandtheSEMhaveincreasedover the past year to 18.6 times and 14.2 times respectivelyas a result of the appreciation in prices as reflected by thebenchmarkindicesin2013.

Fromavaluationperspective,thelowerP/EratiooftheBSEisindicativeoftheBSE’scompetitivenesswhencomparedtoJSEandSEM,andevenwhencomparedwithitslongtermaverageP/E ratioas indicatedearlier.However, theexploitationof thecompetitivenessisafunctionofliquidityasstatedearlierinthereview.EventhoughBSE’sliquidityhasimprovedtremendouslyin 2013 it is still lower than that of the competition, adisadvantageinattractingforeignportfolioinvestment.

As can be seen from Figure 38, the DCI’s performance iscomparable to SEMDEX but it outperformed the JSE AllShare Index (ALSI) and the MSCI Emerging Markets Index,havingappreciatedby20.5%incomparisontotheSEMDEX’sappreciationof21.0%andALSI’sappreciationof17.8%.

An analysis of the 4 indices in US Dollar terms is detailed inFigure39.DuringtheperiodunderreviewtheDCIappreciatedby7.5% inUSDollar terms in comparison to anappreciationof 20.5% in Pula terms, due to the depreciation of the Pulaby 10.8% against the US Dollar. The SEMDEX appreciated by22.6%inUSDollartermsasaresultoftheappreciationoftheMauritianRupeeby1.3%in2013.Incomparison,boththeALSIandMSCI EmergingMarkets Index depreciated by 4.4% and4.9%respectively.

Figure 38: Comparative Performance of DCI with other African Markets and MSCI Emerging Markets Index standardised as at 1 January 2013 (Domestic Currencies)

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Figure 39: Comparative Performance of DCI with other African Markets and MSCI Emerging Markets Index standardized as at 1 January 2013 (US$)

Monetarypolicyandexchangeratemanagementarecomplexsubjects inwhichtheBSEhasnoexpertise.However,astrongandstablecurrencyisahugeadvantageinpromotingfinancialmarkets and marketing Botswana as a financial centre. Asstatedearlier intheReview,Botswanahasseveralcompetitiveadvantages that sets it apart from the competition but thecomparatively weak Pula especially in comparison to theMauritianRupeehaserodedpartofthecompetitiveadvantage.September 2008 was a changing point for capital marketstheworldover. Itwas so for theBSEaswelleven though the

financialcrisishittheBSEcomparativelylate.Sincetheadventof the crisis the BSE has tracked the performance of the DCIespecially incomparisontotheJSEandSEM.ThiscomparisonisdetailedinFigure40.

AsdetailedinFigure40,theDCIhasrecovered49.1%since13May2009,thepointatwhichtheindexbottomedsubsequenttothefinancialcrisis. IncomparisontheJSEALSIandSEMDEXhaveappreciatedby159.7%and127.8%respectively.

Figure 40: Comparative Performance of Indices since the Financial Crisis

INDEX SteepestDeclineSince13_Sep-08 Recoveryto31-Dec-13

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%Change DateRecorded (%)Change (%)Change (%)Change

JSEALSI 32.0 20-Nov-08 159.7 76.9 17.9

SEMDEX 44.4 03-Mar-09 127.8 26.7 21.0

BSEDCI 24.4 13-May-09 49.1 12.0 20.5

BSEFCI 57.6 12-May-09 45.6 (38.3) (1.0)Source: BSE, I-Net Bridge

Source: BSE & I-Net Bridge

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8.3 Footprints

Figures41&42showthedevelopmentoftheBSEoverthepastyearsrelativeto2009.Forthispurpose,thefootprintoftheBSEin2008hasbeenstandardisedandreferencetootheryears ismaderelativeto2008.Itisnotedthat2008wasthebestyearupto2013fortheBSEintermsofitsperformance.

The footprint for the purpose of the analysis is computedtaking into account relative size of themarket (measured byMarket Capitalisation/GDP), turnover (measured by AverageDaily Turnover), liquidity (measured by Turnover/MarketCapitalisation)andvalue(measuredbythereciprocaloftheP/Eratio).

Ascanbeseen fromFigures41&42,2013 is thebestyearasmeasuredbythefootprintduetotherecordturnoverandtherelativesizeofthemarket.

Itisnotedthatincomparisonto2008thefootprintfor2013is1.6timesthesizeofthefootprintfor2008.AscanbeseenfromFigure41,2013hasovershadowedallprioryearsastheresultofincreasesinturnover,liquidityandvaluerelativeto2008.

The only area in which 2008 has surpassed 2013 is size,measuredbymarketcapitalisationtoGDP.Aswasnotedearlierinthereview,marketcapitalisationontheBSEincreasedmainlyasaresultofan increase inprices.Thecontributionfromnewshareslistedtomarketcapitalisationwasminimal.

Figure 41: BSE Footprint in Relation to 2008

2008 2009 2010 2011 2012 2013

MarketCap/GDP(%) 1.00 0.90 0.77 0.68 0.73 0.80

Turnover/MktCap(%) 1.00 0.70 0.92 0.92 0.70 1.52

E/PRatio(x) 1.00 0.92 1.11 1.18 1.30 1.04

AverageDailyTurnover(P) 1.00 0.66 0.82 0.87 0.78 1.99

Area of footprint 2.00 1.24 1.65 1.66 1.50 3.23

Relative Area of Footprint in relation to 2008 (x) 1.00 0.62 0.82 0.83 0.75 1.61Source: BSE, Statistics Botswana

Note 1: Market Capitalisation/ GDP, Turnover/ Market Capitalisation. E/P ratio and Average daily turnover for 2008 were

standardized to 1 and the BSE’s footprint for 2009 to 2013 was compared to the standardized footprint for 2008

Figure 42: BSE Footprint: 2008 to 2013

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1

2

3 Market Cap/GDP(%)

Turnover/Market Cap (%)

E/P Ratio(x)

Average Daily Turnover(P)

2008 2009 2010 2011 2012 2013

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Figures43to44detailthefootprintoftheBSEinrelationtothefootprintoftheJSEandSEMin2013.

According to Figure 45, 2013 was a phenomenal year inthe history of the BSE in relation to its size especially whencomparedwithSEM.The footprintof theBSE increasedmorethantwofoldinrelationtothefootprintoftheSEMfrom35.1%

in2012to72.8%in2013.ThisincreasecanbeattributedmainlytoanincreaseinLiquidityandValue.

ItisnotedthatifthePulaperformanceagainsttheUSDollarisadjustedtomirrorthatoftheMauritianRupee,BSE’sfootprintwouldhaveincreasedto75.5%thefootprintofSEM.

Figure 45: BSE Footprint in Relation to JSE & SEM: 2008 to 2013

2008 2009 2010 2011 2012 2013

BSErelativetoSEM(%) 32.07 27.44 33.41 24.44 35.07 72.76

BSErelativetoJSE(%) 0.03 0.03 0.02 0.01 0.01 0.03

Source: BSE, Statistics Botswana

GDP figures South Africa and Mauritius based on IMF revised GDP estimates for the respective countries

2013 BSE JSE SEM

MarketCap/GDP(%) 1.00 9.07 1.68

Turnover/MktCap(%) 1.00 7.03 0.95

E/PRatio(x) 1.00 0.62 0.81

AverageDailyTurnover($) 1.00 1,480.91 1.25

Area of footprint 2.00 7,206.08 2.75

BSE footprint in relation to JSE and SEM (%) 100.00 0.03 72.76

Figure 43: BSE Footprint Relative to JSE & SEM: 2013

Source: Statistics Botswana, BSE, JSE, SEM, IMF

Figure 44: BSE Footprint in Relation to JSE & SEM: 2013

Note 1: Scale; Turnover/Mkt Cap 1:1, Avg Daily Turnover1:1000, Mkt Cap/GDP 1: 1, E/P Ratio 1:1Note 2: Market Capitalisation/GDP, Turnover/Market, E/P ratio and Average daily turnover for the BSE were standardized to 1 and the footprint for SEM and JSE was computed relative to the BSE’s footprint Source: Statistics Botswana, BSE, JSE, SEM, IMF

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Share split on 14 October 2013

On14OctoberRDCPropertiesundertooka share splitona5for 1 basis resulting in its pricemoving from P7.11 per shareto P1.42 per share. Share splits are usually carried out toimprove affordability of the company’s shares making them

more marketable while the existing shareholders retain thesameproportionofownership.Asaresultofthesharesplitthenumberofissuedsecuritiesincreasedfivefold.

Source: BSE

Source: BSE

9. PRIMARY MARKET

9.1. Equity

Figure 46: RDC Properties Share Adjusted for Share Split

Figure 47: Funds Raised Through the Equity Market: 2008 to 2013

SharePrice(The

be)

 2.3    

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As canbe seen fromFigure46, the share split resulted inanappreciationofthepriceofRDCPropertiesby26.8%between14October2013and31December2013.

In previous Annual Reports, the BSE has articulated theadvantagesofsharesplitsand itspositive impacton liquidity.The pre and post share split performance of RDC Propertiesfurther confirms the advantages of share splits. In the caseof RDCP, it was noted that the value of transaction per dayincreased post- share split in comparison to a similar periodpre-sharesplit.Onadailybasis,thecountertradedshareswithavalue3.3 timeshigher than thepre-sharesplitvaluedue toincreasedtradingvolumearisingfromthesharesplit.

Shumba Coal Limited, a mineral exploration company, listedontheBSE’sForeignVentureCapitalBoardon8April2013.Thecompany listed168.8Mnsharesatan indicativeofferpriceofP1.05pershare.

Aviva Corporation and Hana Mining delisted from the BSE’sForeignVentureCapitalBoardwitheffect from27September2013and25February2013respectively.

Onthedomesticboard,RPCDataLimiteddelistedwitheffectfrom12December2013astheresultofmanagementbuyout.

Overall,theBSElistedonecompanyin2013incomparisonto3companieshavinglistedin2012.ThreecompaniesdelistedfromtheBSEin2013incomparisonto1companyin2012.

9.2 Bonds

9.2.1 Government Bonds

On6September, theBankofBotswana (BoB)auctionedP450Mnworthofbonds,ofwhichP449Mnwasallotted.Inadditiontothetwobonds,asixmonthTreasuryBillwasissuedforavalueofP340Mn(TreasuryBillsarenotlistedandtradedontheBSEatpresent).

Additional issues were made in respect of 2 existing bonds,BW008andBW010.TheBoBalso issuedanewbond (BW011)whichwillmatureon10September2031.

Issues in respect of BW008 and BW010 were fully allotted atP150Mn and P100Mn respectively. BoB offered P200Mn onaccount of BW011 of which P199.0 Mn was allotted. Overall,the3bondswere3.6 timesoversubscribed.TheBW009bondmaturedon11September2013.BW011waslistedontheBSE

on29October2013.On6December2013,BoBauctionedP840Mnworthofbondsand the issuewasallotted in full.Theauctioncomprisedof3bondsonaccountofBW008,BW010andBW011anda6monthTreasuryBillforP340Mn.ThenominalvalueinissueofBW008,BW010andBW011increasedbyP150Mn,P150MnandP200Mnrespectively.Thebondauctionwas2.4timesoversubscribed.

9.2.2 Corporate Bonds

On6December2013,FurnmartLimitedlistedabond(FML025)with a nominal value of P150Mn. FML025 is a 12 year bondmaturingon23October2025.Thebondpaysafixedcouponof8.20%perannumpayablehalf-yearly.

Letshego issuedand listed4bondswith semi-annual couponpaymentson8November2013.TheissuesaredetailedinFigure48.

Figure 48: Corporate Bonds Listed by Letshego in 2013

BondCode AmountIssued(BWP)

Maturity(Years)

CouponPayment(%)

LHL005 50,000,000 4 8.25

LHL006 200,000,000 10 10.50

LHL007 75,000,000 12 10.50

LHL008 25,000,000 14 11.00Source: BSE

Stanbic Bank Botswana redeemed three bonds in issue byexercising call options. The SBBL046, SBBL049 and SBBL052wereredeemedon11June,13Augustand17December2013respectively.

DPCF003andtheSCBB005maturedon2Juneand27November2013respectively.

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10. DEPARTMENTAL REVIEWS

10.1 CENTRAL SECURITIES DEPOSITORY (CSD)

10.1.1 Dematerialization Status of Equities

Asdetailed inFigure49,asatendof2013,59.3%ofdomesticcompanysharesweredematerializedascomparedto48.9%in2012.TheBSEiscurrentlyindiscussionswithNBFIRAregardingmakingdematerializationofsharescompulsory.

Theadvantagesof100%dematerializationare that it reducesthe risk of fraud and forgery associated with paper sharecertificates,ensuresthatinformationonshareholdingisreadily

availablefromCSDBandalsoallowsinvestorstotradeanytimeandfromanywherebysimply instructingthebrokerswithouttheneedtolodgeapapercertificate.Dematerializationalsodoesawaywithinefficienciesassociatedwiththepresenthybridsysteminwhich2shareregistersrequiretobemaintained;onefor dematerialized securities and the other for physical sharecertificates.

Figure 49: Dematerialization Status of Domestic Companies: 2012 and 2013

2012 2013

Security %ofSharesinCSD NumberofSharesinIssue

NumberofSharesDepositedintoCSD

%ofSharesinCSD

ABCH 48.7% 256,885,694 151,624,186 59.0%

Barclays 29.4% 852,161,252 252,745,524 29.7%

BIHL 96.4% 281,070,652 273,163,757 97.2%

Chobe 42.1% 89,405,139 35,795,559 40.0%

Choppies 98.1% 1,174,207,583 1,151,028,324 98.0%

Cresta 26.3% 184,634,944 48,771,479 26.4%

Engen 28.8% 159,722,220 46,197,956 28.9%

FNBB 27.9% 2,563,700,000 732,362,553 28.6%

FSG 88.0% 120,875,000 113,207,543 93.7%

Furnmart 22.2% 606,446,080 138,272,480 22.8%

G4S 27.1% 80,000,000 21,935,280 27.4%

Letshego 98.3% 2,167,540,271 2,130,599,403 98.3%

Olympia 15.8% 28,600,000 4,525,987 15.8%

Primetime 64.4% 179,890,200 115,998,345 64.5%

RDCP 25.6% 220,344,890 209,806,520 95.2%

Sechaba 80.6% 133,014,875 107,105,206 80.5%

Sefalana 90.8% 185,724,463 172,933,839 93.1%

Stanchart 22.3% 298,350,611 67,039,218 22.5%

Turnstar 93.4% 572,153,603 536,586,414 93.8%

Imara 72.0% 59,113,641 43,290,644 73.2%

Wilderness 36.9% 231,000,000 87,617,111 37.9%

NewGold 100.0% 2,250,000 2,250,000 100%

BettaBeta 100.0% 206,671 206,671 100%

Letlole 68.1% 280,000,000 191,080,926 68.2%

NAP 15.0% 604,397,124 90,514,829 15.0%

RPCData 47.5% Delistedin2013 Delistedin2013 Delistedin2013

MARKET 48.9% 11,331,694,913 6,724,659,754 59.3%Source: CSD Botswana

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Figure 50: Dematerialisation of Foreign Companies: 2012 and 2013

2012

2013

Security %ofSharesinCSD NumberofSharesonBotswanaRegistry

NumberofSharesDepositedintoCSD

%ofSharesinCSD

A-CapResources 56.0 663,327 399,070 60.2%

FirestoneDiamonds 100.0 132,000 132,000 100.0%

BotswanaDiamonds 82.1 4,247,654 3,307,108 77.9%

LucaraDiamonds 99.1 25,956,352 25,497,628 98.2%

AfricanEnergy 100.0 187,935 187,935 100.0%

GalaneGold 100.0 3,800 3,800 100.0%

Shumba NotListed 168,225,782 126,007,445 74.9%

Aviva 86.7 Delistedin2013 Delistedin2013 Delistedin2013

Hana 100.0 Delistedin2013 Delistedin2013 Delistedin2013

MARKET 94.4% 199,416,850 155,534,986 78.0%Source: CSD Botswana

As at the end of 2013 dematerialization of foreign companyshares in the Botswana registry was 78% in comparison to94.4% and 91.1% in 2012 and 2011 respectively.The reasonsforthedeclineindematerializationstatuscanbededucedfromFigure50.

Dematerialization of listed company shares has been madecompulsory in many markets in which CSDs have beenintroduced.Thishasbeendoneinordertomakeclearingand

settlement more efficient and to provide the environmentfor CSDs to operate effectively. It is the viewof the CSD thatBotswanatoocanbenefitfromsuchaninitiative.

10.1.2 Progress on Account Opening

The number of authorised accounts opened by clients in theCSD(excludingjointaccounts)was20,027asatDecember2013incomparisonto17,638in2012.

Figure 51: Status of CSD Accounts as at December: 2012 and 2013

2012 2013

ClientClassification TOTAL SBB MOTS CAPS AA SCBB STAN FNBB TOTALForeignCompanies 1,753 36 29 82 5 1,623 231 0 2,006ForeignIndividuals 333 187 46 154 11 0 0 0 398ForeignResidents 884 382 184 393 26 0 0 0 985ForeignJuniors 35 14 9 19 0 0 0 0 42LocalCompanies 1,309 398 349 219 226 171 41 48 1,452LocalIndividuals 12,446 6,063 3,628 4,009 513 0 0 0 14,213LocalJuniors 878 374 257 278 22 0 0 0 931Total 17,638 7,454 4,502 5,154 803 1,794 272 48 20,027

Source: CSD Botswana

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Figure 52: CSDB Client Holdings by Client Category

2012 2013

ClientSuffix Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

LocalCompany

64.3% 66.0% 65.5% 65.7% 62.3% 66.2% 63.4% 62.6%

ForeignCompany

16.8% 15.5% 17.1% 17.0% 17.9% 18.4% 19.7% 24.9%

LocalIndividual

17.5% 17.0% 15.9% 15.8% 15.6% 14.0% 15.6% 11.2%

OtherClients

1.4% 1.5% 1.5% 1.5% 4.2% 1.4% 1.3% 1.3%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Source: CSD Botswana

2012 2013

DomicilesofClients Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

LocalCitizens 81.8% 83.0% 81.4% 81.6% 80.9% 80.3% 79.1% 73.9%

USCitizens 6.5% 6.4% 6.3% 6.3% 6.4% 5.8% 6.1% 6.5%

UKCitizens 3.4% 3.4% 3.4% 3.2% 5.0% 4.1% 4.9% 7.2%

SADCRegion 3.3% 3.2% 4.6% 4.5% 7.7% 9.8% 9.9% 12.4

OtherRegions 4.9% 4.0% 4.3% 4.4% 80.9% 80.3% 79.1% 73.9%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Source: CSD Botswana

AsdetailedinFigure52,localcitizensdominatetheoverallholdingsontheCSDB.Holdingsbyforeigninstitutionalinvestors,especiallybyUKcitizensincreasedsignificantlyin2013ascomparedto2012whilsttheholdingsbyUScitizensremainedalmostunchanged.

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10.2 MARKET DEVELOPMENT

10.2.1 Public Awareness Programmes

In 2013, the BSE continued to pursue its objective of increasing investor awareness on the stockmarket by undertakingmarketdevelopment activities. The initiatives included presentations to various organizations around the country, national radio andtelevisionprogrammesaswellasnewspaperarticles.

ThepresentationsconductedbytheBSEin2013aredetailedinFigure53.

Figure 53: Presentations Conducted by the BSE: 2013

Date Organisation Attendees No.ofParticipants

07Feb NalediSSS TeachersandOtherstaffMembers 31

13Feb SeroweIHS Employees 31

19Feb MinistryofDefenceJustice&Security Employees 43

21Feb NanogangCJSS TeachersandOtherstaffMembers 27

19Mar MonthofYouthAgainstAIDSWorkshop Employees 26

20Mar UBFinanceSociety Students 72

11Apr JuniorAchievementBotswana Students 45

14May MediaBriefingonBSEStrategy BusinessJournalists 20

23May ETFSeminar BrokersandBusinessJournalists 25

07Jun TeachersDayCelebration-Dibete Teachers,ParentsandStudents 60

27to30Jun GhanziAgricultureShow Public

18Jul Maru-A¬-PulaSchool Students 32

22to28Jul ConsumerFair Public 389

31Jul MophanePrimarySchool AllCommerceteachersfromvariousschools 102

31Jul DepartmentofHousing Men’sworkshop 43

05Aug BatananiCJSS Teachers 29

12Aug GakutoVillage Residents 24

13Aug DitshengSACOS ManagementRepresentatives 2

04Sept Kopong Villagers&Teachers 45

23&24Sept NorthWestDistrictCouncil(withPEEPA) DistrictCouncillorsandseniorcounciladminstaff-Maun

105

9&10Oct GhanziBrigade Students,Teachers&Villagers 329

16October Thebrotherhood BACStudents 9

22Oct PrivatizationPitsoforTradeUnions(withPEEPA) TradeUnionLeaders 67

4&5Nov SouthEastDistrictCouncillors(withPEEPA) DistrictCouncillorsandseniorcounciladminstaff-Oodi

98

13Nov BDF Employees 32

27Nov BotetiSubDistrictCoucil CouncilMembers 18

7Dec ShoshongFinanceSociety Public 208

TOTAL 1,912Source: BSE

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10.2.2 Radio and Television Programmes

The BSE has partnered with various media houses to helppromotecapitalmarketsbycontributinginformativearticlestonewspapersandtakingpartinradiotalkshowstoeducatethepublic.The BSE undertookpresentations on theweekly radioprogrammes of “Tsele Le Tsele” and “Business Thriller” everyFridayonRB1andRB2,at5:30pmand4:00pmrespectively.TheExchangealsopublishedaweekly“MarketPerformance”reportin the Botswana Government newspaper, “The Daily News”.TheBSEalsoransnippetsonETFsonYaronaFM,alocalprivatecommercialradiostation.TheBSEpresentedstatisticsonmarketperformanceandaseriesofprogrammestoeducatethepublicabout investing in the stock market. The presentations wereaired through a television program called“First Issues” everyTuesdayfrom7:30pm–8:00pm.

10.2.3 Consultations with Private Companies to Promote Listings on the BSE

The BSE conducted one-on-one meetings with companiesto take them through the process and advantages of listingon the BSE. A workshop was held in June 2013 to educatecompanies on how they can realize synergies by listing ontheBSE.Theworkshopwas attendedby representatives fromprivate companies, parastatals, entrepreneurs, capital marketregulators as well as other parties involved in the process oflistingcompaniesontheBSE.

10.2.4 Corporate Social Investment (CSI)

The BSE is of the view that today’s students are tomorrow’sinvestors and hence thought it fit to invest in the educationof young students. In 2013, theBSE embarkedon the“Adopta School” initiative, adopting two primary schools beingBoitumeloPrimarySchoolandXakawePrimarySchoolinSebeleandMaunregionsrespectively.Throughthis initiativetheBSEhasmanagedtorefurbishthelibraryfacilitiesofthetwoschools.

10.3 PRODUCT DEVELOPMENT

The Product Development initiatives undertaken by the BSEin2013continued to focuson introducingnewproductsandespeciallyonthedevelopmentoftheBondMarket.ThefollowingisasynopsisofworkcarriedoutbytheProductDevelopmentDivisionoftheBSEinthisregards.

10.3.1 Introduction of a Botswana Bond Index Series (BBIS)

Asnotedearlier,theBSElaunched3bondindicesinApril2013.Itisnotedthatthebondindiceshavebeenwellreceivedbythemarketwithmostcustodians looking toadopt the indices forbenchmarkingandperformanceevaluationofbondportfolios.

ThisisawelcomedevelopmentintheBotswanaBondMarket.As stated earlier, bond indices would also form the basis fordevelopingbondindexfundsandotherbondrelatedproducts.Thebondindicescouldalsobeusedbyinvestorstojudgeandobjectivelychoosebetweeninvestinginalternativedebtfunds.

A Bond IndexAdvisoryCommitteewas appointed to overseeand advise on best practice in constructing indices and onmatters relating to rules governing the management of thesaid indices. The committee comprises representatives fromasset management companies, brokerage firms, commercialbanks,pensionfundsandconsultingfirms.TheroleoftheBSEis toprovide secretarial services to the committee.NedGroupBeta Solutions, ofNedBank SouthAfrica, hasbeen appointedconsultants to theadvisory committee.The committeemeetseveryquarter following an audit of the indices, to review theaudit, market opinion and discuss issues of best practice inrelationtothemanagementoftheindices.

10.3.2 Workshop on Exchange Traded Funds (ETFs)

The BSE and Nedbank Capital held a media educationalworkshop on 23 May 2013. The workshop was attended bybrokers and business journalists.The aimwas to educate theattendees about analyzing the performance of ETFs.The BSEisoftheviewthatraisingawarenessaboutinvestinginETFsisextremelyimportanttoincreaseliquidityinthesesecurities.

10.3.3 Global Depository Receipts (GDRs)

TheBSEheldatwodayworkshopon12and13June2013withfundmanagers,NBFIRA, brokers andbusiness journalists thatwasaimedatexploringthefeasibilityofintroducingGDRs.TheBSE held theseworkshops in collaborationwith Bank ofNewYorkMellon(BNYMellon).ThroughtheworkshoptheBSEwasabletogaugetheappetitefortheseproductsinthemarketandtherequirementswithregardtothestructureoftheproductsasproposedbyfundmanagers.

It isalsonotedthatthereareotherstrategicpartnerswhoareinterested in partnering with the BSE in launching GDRs forthe Botswana market. More awareness programmes will beundertakenin2014toeducatethepublicaboutGDRs.Further,a surveywill be conducted amongst institutional investors tohelpidentifyglobalstocksthatcouldbeusedtocreateGDRstogiveinvestorsexposuretointernationalstocks.

10.3.4 Registration of the Bond Market AssociationTheBSEfacilitatedtheregistrationoftheBotswanaBondMarketAssociation (BBMA)with theRegistrar of Societies, fundedbysponsorshipsfrommarketparticipants.TheBBMAwillbegin

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formal implementationof itsmandate in2014.TheBSEplanstoworkwith the BBMA to resolve structural issues impedingbondmarketdevelopmentwith a view topromoteefficiencyand liquidity of the bond market. A liquid bond market willprovideaconduciveenvironmentfortheprivatesectortoraisecapital directly from investors. Investors in turn are providedwithdifferingrisk-returnoptionsthatwillenablethemtobetterstructuretheirinvestmentportfolios.

The BBMA is administered by a Committee comprisingrepresentativesfromassetmanagementcompanies,brokeragefirms, commercial banks and bond issuers. The BSE providessecretarialservicestotheAssociation.

10.3.5 Distribution of Trade Statistics to International Data Vendors

Following the implementation of the Automated TradingSystem (ATS) on 24 August 2012, the BSE began exploringopportunities to commercialise and generate income fromthesaleoftradestatisticstodatavendorsbyprovidingvariousformsofdataand information.Commercialisationofdata isarevenue generating activity undertaken by stock exchangeswhichhaveimplementedautomatedtrading.

TheATShasfunctionalitytodisseminaterealtimeinformation,snapshots of trading information over a configured period(presently configured for 30 minutes) and snapshots oftrading information configured based on a given number ofmessages.TheBSEhassigneddatadisseminationagreementswithDirectFNand I-NetBridge.Discussionsonsigningsimilaragreements are on-going with Bloomberg and Reuters whohaveexpressedinterestinsubscribingtotheBSEdatafeed.ThedistributionofBSEtradestatisticswillgiveBSEmoreexposureto international investors and will complement its marketdevelopmentinitiatives.

10.3.6 Dual Listing of the New Platinum ETF (NewPlat ETF)

AbsaCapitalofSouthAfricaintendstoduallisttheNewPlatETFontheBSE.TheETFisprimarilylistedontheJSE.TheNewPlatETFisexpectedtobelistedinthefirsthalfof2014.

10.4 INFORMATION TECHNOLOGY (IT)

10.4.1 IT Policies

During2013,theBSEembarkedonanexercisetoformaliseanddocument IT Policies, Procedures and Processes.This exercisewasmotivatedbytheincreaseincomplexityoftheIT

infrastructureandtheconsequentialneedforbettercontrolofthe interaction of the userswith IT Systems, Information andrelatedservices.

TheBSEengagedtheservicesofRealfin(Pty)Ltdasconsultantsto document the IT Policies and Procedures. The project wascompleted in January 2014. Once approved by the MainCommittee,theITPolicieswillguidethedaytodaymanagementoftheITDepartmentandwillgoalongwayinensuringthattheBSE,withitsincreasingrelianceonITsystems,meetsitsstrategicobjectives.

10.5 LEGISLATION AND REGULATION

10.5.1 Amendment of the Equity and Debt Listing Rules

The BSE has completed drafting the amended Equity ListingRules and the draft has been circulated to the BSE MainCommittee.Thepurposeofamendingtherulesistomakethemuptodate,preciseanduserfriendly.TheBSEhascommencedthe process of consultationwith listed companies, regulatorsandotherstakeholdersandexpectstoimplementtherules inthelatterpartof2014.

10.5.2 Securities Bill

TheBSEishappytoreportthattheSecuritiesBillwasapprovedbyCabinetinFebruary2014andwillbepresentedtoParliamentinduecourse.

ThedraftingoftheBSETransitionBillhasbeencompletedandisexpectedtobesubjecttotheenactmentprocessinduecourse.

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10.6 HUMAN RESOURCES DEVELOPMENT

10.6.1 Staff Welfare

TheBSEcontinuedtopursuestaffwelfareandwellnessactivitiesin2013.Theaimwastocreateawarenessonissuesrelevanttostaffmembers, theirworking environment and their personalwellbeing.TheBSEhassetupacommitteeofstaffvolunteerswho have been entrusted with the task of organising staffwelfareactivitiesinasystematicmanner.

Amongst the activities undertaken in 2013 included thosethatwerespirituallyoriented,workshopsonpersonalfinancialmanagement and talks on motivation and a team buildingexercise. Details of the staff welfare activities undertaken in2013arepresentedinFigure54.

Figure 54: Activities Undertaken by the BSE Staff Welfare Committee: 2012 -2013

Date ActivityUndertaken

06-Jun-12 SpiritualWellbeing

30-Aug-12 Presentation and Health Tests: NutritionalWellness

01-Aug-12 MotivationalTalk:PersonalDifferentiation

18-Jan-13 Fitness&Lifestyle

15to17-Mar-13 TeamBuildingExercise

05-May-13 Athletics:GaboroneSteinmertzMarathon

15-May-13 Presentation:SilentKillerDiseases

19-Jul-13 Presentation:Health&Safety

04-Sep-13 Presentation: Personal Branding for theWorkplace

Source: BSE

10.6.2 Staff Training

Anyorganisationisonlyaseffectiveasthosethatdrive it.TheBSEiscommittedtodevelopingandretainingstaffwhoarethekeydriversoftheBSEStrategy.

Inordertodevelopandempowerstaffbothinthescienceandart of managing stock exchanges and depositories, the BSEdedicated 6% of total operational expenses in 2013 to stafftraining. Members of staff were nominated to participate incourses and conferencesdependingon their respectivefieldsofexpertise.

Thefollowingtrainingprogrammeswereattendedbystaff:• SecuritiesMarketsOperations&RiskManagement ProgrammeconductedbytheFinancialTechnologies KnowledgeManagementCompany(FTKMC)• OECDConferenceonAfricanPublicDebt ManagementandBondMarkets• Planning,Budgeting&RollingForecastsMasterclass• ElectronicRecords&InformationManagement• BankofNewYorkMelonAnnualDepositoryReceipts Seminar• WorkshoponBondsconductedbytheBondSchool ofHongKong• ProgrammeonProfessionalQualificationfor Regulators• ProgrammeonGlobalSecurities

10.7 FINANCE & ADMINISTRATION

TheconsolidatedrevenueoftheBSEincreasedby17%in2013.This was mainly due to the record turnover achieved in theyear.Theconsolidatedexpensesgrewby9.6%afteradjustingfor reversal of provisionsmadeon account of doubtful debtsamountingtoP2.6Mnin2012.

Interest generated on funds invested in money marketfunds and call deposits doubled in comparison to 2012. Thegrowth in investment income is attributed to the setting upofan InvestmentCommitteewhich is responsible for treasurymanagement.

For the first time since its inception, the CSDB generatedsufficient revenue tomeet its expenditure andmake a profitof P190, 000without depending on the subvention.This is acommendable improvementwhencomparedtoa lossofP1.9Mn(beforeaccountingforthesubvention) in2012.Thistooisattributedtothehighturnoverin2013.

ForthethirdsuccessiveyeartheBSEdidnothavetodependontheGovernment subvention.TheExchangeearnedaprofitofP5.4Mnin2013.

The strong financial performance and the Governmentsubvention contributed P14.9 Mn to reserves in 2013. As at31December2013thereservesoftheBSEwereP31Mn.OnaconsolidatedbasisthereserveswereP35Mn.Itisexpectedthat

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Figure 55: Financial Performance of BSE: 2010 to 2013

2010P’000

2011P’000

2012P’000

2013P’000

BSE CSDB CONSOL BSE CSDB CONSOL BSE CSDB CONSOL BSE CSDB CONSOL

INCOME

CommissionIncome

2,620 1,940 4,560 2,699 2,092 4,791 2,507 1,813 4,320 6,192 4,667 10,859

ListingsandAnnualSusutainingfees

8,335 - 8,335 12,635 - 12,635 16,777 16,777 13,048 - 13,048

OtherIncome 360 304 664 751 441 1,192 529 512 1,041 1,386 648 2,034

Total Income from Operations

11,315 2,244 13,559 16,085 2,533 18,618 19,813 2,325 22,138 20,626 5,315 25,941

-

EXPENDITURE - -

DevelopmentExpenditure

1,356 633 1,990 799 746 1,545 1,492 741 2,233 1,643 975 2,618

AdministrativeExpenditure

10,318 2,810 13,128 11,762 3,074 14,836 10,277 3,463 13,740 13,596 4,150 17,746

Total Expenditure 11,674 3,443 15,117 12,561 3,820 16,381 11,769 4,204 15,973 15,239 5,125 20,364

Profit/(Loss)PriortoSubvention

(359) (1,199) (1,558) 3,524 (1,287) 2,237 8,044 (1,879) 6,165 5,387 190 5,577

Subvention required to break even

359 1,199 1,558 - 1,287 - - 1,879 - - - -

Subventionreceived

1,591 934 2,525 4,039 3,037 7,075 3,145 4,143 7,288 5,025 4,263 9,288

Profit 1,232 (265) 967 7,563 1,750 9,312 11,189 2,264 13,453 10,412 4,453 14,865

ExtenttowhichIncomefromoperationsmeetadministrativeexpenses

100% 80% 100% 100% 82% 100% 100% 67% 100% 100% 100% 100%

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ThecontributionandeffortmadebyeachandeverystaffmemberwhoenabledtheBSEnotonlyto“talkthewalk”but“walkthetalk”isgratefullyacknowledged.

REACHING NEW HEIGHTS

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thesereserveswillbecapitalizedwhentheBSEisconvertedintoacompanyposttheenactmentoftheSecuritiesBill.

11. REGIONAL COOPERATION AND PARTICIPATION AT CONFERENCES

TheCommitteeof SouthernAfrican Stock Exchanges (COSSE)held several meetings in 2013. The BSE participated inmeetingsheldinZimbabweandJohannesburginFebruaryandSeptember2013respectively.

The BSE attended the annual conference hosted by AfricanStockExchangesAssociation (ASEA) inAbidjan, IvoryCoast inDecember2013.

CSDBwasrepresentedattheAfricanandMiddleEastDepositoryAssociation(AMEDA)meetingheldinDubaiinSeptember2013andattheNationalSettlementofDepositoriesconferenceheldinRussiainMay2013.

12. APPRECIATION

IthasbeenmyprivilegetobetheCEOoftheBSEforalmost8years.DuringthisperiodtheBSEhasundergonemanychangesand developments as articulated in the CEO’s Reviews since2006.ManymorechangeswilltakeplaceaftertheenactmentoftheSecuritiesBillandtheBSETransitionBill.

Therehavebeenmanywhohaveassistedustogettothisstage:TheMinistryofFinanceandDevelopmentPlanning(MFDP)hashad the foresight to recognize the importance of the CapitalMarketandtheBSEintheeconomicdevelopmentofBotswana.TheircontinuedsupporttotheBSEisgratefullyacknowledged.I thankNBFIRAandtheBankofBotswanafortheirsupporttotheBSEandCSDBin2013.

Iwishtoacknowledgethesupportandtheguidancereceivedfrom the BSE Main Committee and several Sub-Committees.I wish to thank the Chairman, Mr Patrick O’Flaherty, and allCommitteeMembersfortheircontribution.

BSEreliesheavilyonitsstakeholderstoachieveitsobjectives.IwishtoacknowledgethesupportreceivedfromMemberFirms,Stockbrokers, Participants of CSDB, Settlement Bank, ListedCompaniesandInvestors.

MrMoshe Libengo, Finance and AdministrationManager lefttheBSEinJune2013.IthankhimforthecontributionmadetotheBSEandwishhimsuccessinhisfutureendeavours.

TheBSEoperatesinacontinuouslychangingenvironmentthatis not always congenial and supportive of its objectives. TheBSE’s corporate culturehasbeen forgedbearing this inmind.Frommyperspective, I see the BSE as an organizationwhichis knowledge driven, flexible, adaptable and is continuouslylearning. It isthosewhoworkforanorganizationthatgives itshapeandformitsculture.

“The stuff that allows most pros to succeed cannot be [taught]; among them are willingness to work long and hard, to study and learn, and a fierce determination to succeed.”–ArthurMorris.

The contribution and effort made by each and every staffmemberwhoenabled theBSEnotonly to“talk thewalk”but“walkthetalk”isgratefullyacknowledged.

Hiran Mendis ChiefExecutiveOfficer

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GRAPHICAL REVIEW

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-

1

2

3

4

5

6

7

8

9

10

 -­‐        

 500    

 1,000    

 1,500    

 2,000    

 2,500    

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Cum

.Ave

rage

Dai

ly T

urno

ver (

P'M

n)

Cum

ulat

ive

Turn

over

(P'M

n)

Month

Cumulative Turnover (P'Mn)

Cum. Average Daily Turnover (P'Mn)

211.4 238.6

414.7

824.56

1166.19

763.84

962.8 1007.9 894.7

2,315.4

0

500

1000

1500

2000

2500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Valu

e (P

'Mn)

Year

Equities: 2013

ValueofSharesTraded

ComparisonwithOtherMarkets

VolumeofSharesTraded

TotalMarketCapitalisation

61.93 44.16 87.25

124.6

193.31 167.6

308.7

458.7 409.9

710.5

0

100

200

300

400

500

600

700

800

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

No.

in m

illio

ns

Year

0

100,000

200,000

300,000

400,000

500,000

600,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

P (M

illio

ns)

Year

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GRAPHICAL REVIEW

MonthlyMarketCapitalisation2013

DCI%MonthlyChange

DomesticMarketCapitalisationasa%ofGDP

FCIMonthly%Change

32,000

34,000

36,000

38,000

40,000

42,000

44,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

P (M

illio

ns)

Month

44.83

53.07

40.26 39.14

33.49 30.93 31.55

37.14

0

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011 2012 2013

Perc

enta

ge (%

)

Year

-­‐2.00  -­‐1.50  -­‐1.00  -­‐0.50  0.00  0.50  1.00  1.50  2.00  2.50  3.00  3.50  4.00  4.50  5.00  5.50  6.00  

Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec  

Perc

enta

ge (%

)

Month

-1.00

-0.80

-0.60

-0.40

-0.20

0.00

0.20

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Perc

enta

ge (%

)

Month

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Equities: 2013

MarketPricetoBookValue

DCI&FCIYearly%ChangeIndicesPerformance

PriceEarningsRatio

0

1

2

3

4

5

6

7

8

9

10

2007 2008 2009 2010 2011 2012 2013

Tim

es (X

)

Year

0

2

4

6

8

10

12

14

16

18

2007 2008 2009 2010 2011 2012 2013

Tim

es (X

)

Year

80

84

88

92

96

100

104

108

112

116

120

124

1-Ja

n 14

-Jan

27

-Jan

9-

Feb

22-F

eb

7-M

ar

20-M

ar

2-A

pr

15-A

pr

28-A

pr

11-M

ay

24-M

ay

6-Ju

n 19

-Jun

2-

Jul

15-J

ul

28-J

ul

10-A

ug

23-A

ug

5-Se

p 18

-Sep

1-

Oct

14

-Oct

27

-Oct

9-

Nov

22

-Nov

5-

Dec

18

-Dec

31

-Dec

Inde

x Le

vel

2013

BSE DCI

SEMDEX

JSE ALSI

MSCI EM

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GRAPHICAL REVIEW

Dividendyield

Domesticcompaniesbygainsinmarketcapitalisation

DomesticCompaniesByGainsInPrice

MonthlyTurnover(P’Mn)

0

1

2

3

4

5

6

2007 2008 2009 2010 2011 2012 2013

Perc

enta

ge (%

)

Year

0%

2000%

4000%

6000%

8000%

10000%

12000%

Sefalana FSG

Choppies

FNBB

Engen

Furnmart

ABCH

Primetim

e

Letlole

Sechaba

Chobe

Letshego

Stanchart

Turnsta

r

Cresta

BIHL

Perc

enta

ge

Company

-

50

100

150

200

250

300

350

400

450

500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Turn

over

(P'M

n)

Month Sefa

lana

Sech

aba

Cres

taBI

HL

Chop

pies

Chob

e

Prim

etim

e

Stan

char

t

Wild

erne

ss

Turn

star

Furn

mar

t

Enge

n

Lets

hego

Letlo

le

RDCP

FNBB

ABCHFS

G

0

20

40

60

80

100

Increasein

MarketC

ap(%

)

NAP

BOTSWANA STOCK EXCHANGE Annual Report 2013 BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

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The size of domesticcompanies relative tothesizeoftheeconomy,indicatedby the ratioofmarket capitalisation toGDP,increasedto

in201333.6%

REACHING NEW HEIGHTS

BOTSWANA STOCK EXCHANGE Annual Report 2013 BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

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MARKET STATISTICSTable 1: Number of Companies Listed

2007 2008 2009 2010 2011 2012 2013

NumberofNewListings 2 2 0 2 6 3 1

NumberofDe-listings 2 2 0 3 1 1 3

ForeignListings 11 11 11 9 12 13 12

DomesticListings 20 20 20 21 23 24 23

Total 31 31 31 30 35 37 35

Table 2: Market Capitalization of BSE Listings: 2013

NumberofShares PricePerShare(P) MarketCapitalisation(P)

NewForeignListings(Dual)

ShumbaCoal 168,846,078 1.05* 177,288,382

Total 168,846,078 168,846,078*The price given is the bid price on the listing date of 08 April 2013.

Table 3: BSE Market Capitalization as at Year ended December (P’000,000)

2007 2008 2009 2010 2011 2012 2013

DomesticMarketCapitalisation 32,702.6 27,706.1 28,536.2 26,245.7 30,694.3 35,530.8 43,457.6

ForeignMarketCapitalisation 535,325.0 286,260.2 346,001.1 408,380.3 380,909.5 376,818.2 373,132.8

Total Market Capitalisation 568,027.54 313,966.31 374,537.22 434,625.97 411,603.77 412,349.01 416,590.41

Table 4: Market Capitalisation as at Quarter ended (P’000,000)

2012 2013

Mar Jun Sep Dec Mar Jun Sep Dec

DomesticMarketCapitalisation 32,910.4 33,873.5 34,962.1 35,530.8 39,740.2 41,654.9 41,206.3 43,457.6

ForeignMarketCapitalisation 382,120.4 388,952.7 387,877.1 376,818.2 373,045.8 372,593.4 372,034.8 373,132.8

TotalMarketCapitalisation 415,030.8 422,826.2 422,839.2 412,349.0 412,786.0 414,248.4 413,241.1 416,590.4

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Table 5: Market Capitalization by sector as at Year ended December (P’000,000)

2007 2008 2009 2010 2011 2012 2013

Banking 19,304.4 16,563.2 16,858.3 12,953.8 16,116.8 16,674.8 19,815.1

FinancialServices&Insurance 25,391.5 19,486.8 20,466.1 21,353.5 21,574.8 24,560.7 25,958.9

Retailing&Wholesaling 12,978.1 3,532.9 3,134.7 2,617.5 3,098.3 6,099.8 8,884.8

Property&PropertyTrust 934.8 907.9 944.7 1,083.7 2,788.2 3,180.4 3,603.8

Mining&Materials 508,427.8 272,109.5 331,978.3 393,608.9 365,238.4 359,135.9 355,342.4

SecurityServices 220.0 181.1 188.8 263.0 480.0 465.6 246.4

InformationTechnology 18.9 15.7 7.9 7.6 7.9 11.0 0.0

FuneralServices 0.0 132.0 187.2 224.4 175.2 157.1 297.4

Energy 769.9 702.8 586.2 1,022.2 881.7 983.9 1,296.9

Tourism 295.4 334.4 185.1 1,491.5 1,242.6 1,079.9 1,144.8

Table 6: Market Capitalization by sector as at Quarter ended (P’000,000)

2012 2013

Mar Jun Sep Dec Mar Jun Sep Dec

Banking 16,363.0 17,009.1 17,591.7 16,674.8 18,521.9 19,715.4 19,087.9 19,815.1

FinancialServices&Insurance 21,994.2 21,469.7 21,464.1 24,560.7 26,002.1 25,866.8 25,446.5 25,958.9

Retailing&Wholesaling 4,738.5 5,031.5 5,656.3 6,099.8 7,171.6 7,834.8 8,370.9 8,884.8

Property&PropertyTrust 2,944.6 3,290.6 3,129.9 3,180.4 3,201.6 3,333.6 3,416.9 3,603.8

Mining&Materials 366,203.0 373,308.0 372,238.0 359,135.9 355,263.5 354,816.3 354,266.3 355,342.4

SecurityServices 492.0 473.6 474.4 465.6 464.0 394.4 268.8 246.4

InformationTechnology 7.9 11.0 11.0 11.0 9.8 9.1 9.1 0.0

FuneralServices 158.4 174.1 180.1 157.1 175.3 217.6 215.2 297.4

Energy 881.7 881.7 998.3 983.9 1,022.2 1,135.6 1,237.9 1,296.9

Tourism 1,247.6 1,177.2 1,095.3 1,079.9 954.2 924.7 921.6 1,144.8

Table 7: Trading Statistics as at Year ended December

2009 2010 2011 2012 2013

VolumeTraded(Mn) 167.6 308.7 458.7 409.9 710.5

ValueTraded(P’Mn) 763.9 962.8 1,007.9 894.7 2,315.4

No.ofDeals 4,135 4,971 5,022 6,488 12,029

LiquidityRatio 2.7 3.5 3.5 2.7 5.9

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MARKET STATISTICS

Table 8: Trading Statistics as at Quarter ended

2012 2013

Mar Jun Sep Dec Mar Jun Sep Dec

VolumeTraded(Mn) 75.1 88.4 70.7 175.7 99.7 229.3 134.5 246.9

ValueTraded(P’Mn) 171.6 195.58 146.3 381.3 250.8 684.1 510.4 870,1

No.ofDeals 1,170 1,412 1,366 2,540 2,467 3,824 3,011 2,727

Table 9: BSE Indices as at Year ended December

2007 2008 2009 2010 2011 2012 2013

DCI 8,421.6 7,035.5 7,241.9 6,412.9 6,970.9 7,510.2 9,053.4

FCI 2,201.0 1,192.0 1,418.3 1,673.9 1,703.9 1,599.5 1,583.5

LASI 558.7 670.5 776.2 795.3 752.7 760.8

DFSI 835.7 911.9 771.9 862.5 911.8 1,067.1

FRSI 536.5 654.5 776.3 790.1 731.9 720.3

DCFFI 2,014.6 1,904.7 2,143.7 2,643.7

DFSFFI 3,034.1 2,825.0 3,199.1 3,901.3

LASFFI 1,760.5 1,677.5 1,892.1 2,315.3

Table 10: BSE Indices as at Quarter ended

2012 2013

Mar Jun Sep Dec Mar Jun Sep Dec

DCI 7,037.5 7,238.1 7389.3 7,510.2 8,399.9 8,688.5 8,594.9 9,053.4

FCI 1,709.3 1,668.0 1661.7 1,599.5 1,584.3 1581.2 1,578.8 1,583.5

LASI 797.9 781.4 779.3 752.7 754.1 755.3 753.4 760.8

DFSI 879.4 896.6 905.4 911.8 1,035.9 1,057.7 1,018.4 1,067.1

FRSI 790.5 770.7 766.2 731.9 724.3 722.3 721.1 720.3

DCFFI 1,901.0 1,871.9 1,951.7 2,143.7 2,592.7 2,496.0 2,456.2 2,643.7

DFSFFI 2,820.5 2,723.6 2,809.9 3,199.1 3,993.3 3,750.7 3,600.0 3,901.3

LASFFI 1,676.9 1,649.1 1,719.8 1,892.1 2,268.4 2,179.8 2,149.6 2,315.3

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Table 11: Top Ten Domestic Companies by Volume Traded (Mn)

2012 2013

Company Volume Company Volume

Letshego 224.12 Letshego 237.52

Choppies 37.74 Choppies 140.13

Turnstar 33.54 FNBB 107.34

FNBB 28.04 Turnstar 75.69

Barclays 16.48 FSG 39.73

FSG 13.32 BIHL 23.33

NAP 7.96 NAP 15.60

Letlole 7.85 Stanchart 10.82

Primetime 7.75 Sechaba 8.86

Sefalana 5.87 ABCH 8.31

Table 12: Top Ten Domestic Companies by Value Traded (P’ Mn)

2012 2013

Company Value Company Value

Letshego 359.22 Letshego 550.51

Barclays 114.61 Choppies 415.79

FNBB 78.64 FNBB 393.52

Choppies 69.68 BIHL 246.32

BIHL 56.13 Sechaba 157.63

Turnstar 51.40 Stanchart 125.15

Sechaba 28.19 Turnstar 124.38

FSG 18.58 FSG 78.37

NAP 17.58 Barclays 49.53

Sefalana 16.85 ABCH 41.53

Table 13: Top Ten Foreign Companies by Volume Traded (Mn)

2012

2013

Company Volume Company Volume

Disc.Metals 0.947 Lucara 0.694

AfricanCopper 0.761 AfricanCopper 0.547

BOD 0.631 Shumba 0.498

Blue 0.422 BOD 0.245

Aviva 0.138 Discovery 0.118

Lucara 0.150 Aviva 0.054

A-Cap 0.040 A-Cap 0.025

AFR 0.021 Blue 0.002

CICEnergy 0.014 AfricanEnergy 0.001

Hana 0.007 GG 0.000

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MARKET STATISTICSTable 14: Top Ten Foreign Companies by Value Traded (P’ Mn)

2012

2013

Company Value Company Value

Disc.Metals 11.075 Lucara 7.180

Lucara 0.609 Shumba 0.527

Anglo 0.465 Discovery 0.319

BOD 0.279 AfricanCopper 0.096

AfricanCopper 0.260 BOD 0.095

Blue 0.183 Aviva 0.046

CICEnergy 0.144 A-Cap 0.018

Aviva 0.097 Firestone 0.001

AFR 0.057 GG 0.001

A-Cap 0.047 Blue 0.001

Table 15: Top Ten Domestic Companies by Market Capitalisation (P’ Mn)

2012

2013

Company MarketCap Company MarketCap

FNBB 7,178.36 FNBB 10,331.71

Barclays 5,581.66 Letshego 5,093.72

Letshego 3,817.40 Barclays 4,695.41

Stanchart 2,983.51 Choppies 3,921.85

BIHL 2,909.08 Stanchart 3,490.70

Choppies 2,407.13 BIHL 2,965.30

Sechaba 2,093.65 Sechaba 2,525.95

NAP 1,323.63 NAP 1,329.67

Furnmart 988.51 ABCH 1,297.27

Engen 983.89 Engen 1,296.94

Table 16: Top Ten Foreign Companies by Market Capitalisation (P’ Mn)

2012

2013

Company MarketCap Company MarketCap

Anglo 347,612.36 Anglo 347,613.03

Investec 14,814.01 Investec 15,185.10

Disc.Metals 6,287.00 Lucara 4,331.13

Blue 2,758.64 Blue 2,605.38

Lucara 1,881.46 AfricanEnergy 1,156.84

Firestone 1,093.70 Firestone 869.50

AFR 957.30 Discovery 375.22

Hana 392.00 GG 355.61

GG 355.61 AfricanCopper 267.32

AfricanCopper 250.78 Shumba 184.04

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BOTSWANA STOCK EXCHANGE Annual Report 2013

Table 17: Bond Market Statistics: 2013

BondCode MaturityDate Nominalamount(P) CouponRate% Trade(P)

BBB001 30/10/2014 100,000,000 -

BBS002 15/12/2016 115,000,000 12.00 -

BBS004 26/11/2019 75,000,000 11.10 -

BBS005 03/12/2023 150,000,000 11.20 -

BBS006 04/08/2018 110,000,000 -

BHC017 10/12/2017 286,000,000 -

BHC020 10/12/2020 103,000,000 10.10 -

BW003 31/10/2015 1,642,000,000 10.25 12,924,861

BW005 12/09/2018 1,233,000,000 10.00 5,466,573

BW007 05/03/2025 1,295,000,000 8.00 38,402,188

BW008 08/09/2020 858,000,000 7.75 18,739,044

BW009* 11/09/2013 - 7.25 2,289,988

BW010 08/03/2017 618,000,000 7.75 16,836,922

BW011 10/09/2031 399,000,000 -

BVI001 07/05/2018 70,000,000 11.23 -

BVI002 14/07/2015 50,000,000 -

DPCF004 02/06/2016 220,000,000 10.45 -

DPCF005 02/06/2019 100,000,000 10.60 -

DPCF006 02/06/2022 55,000,000 10.75 -

DPCF007 02/06/2025 35,000,000 10.90 -

FML015 12/07/2015 50,000,000 -

FML025 23/10/2025 150,000,000 8.20 -

LHL005 08/11/2017 50,000,000 8.25 -

LHL006 08/11/2023 200,000,000 10.50 -

LHL007 08/11/2025 75,000,000 10.50 -

LHL008 08/11/2027 25,000,000 11.00 -

NDB001 01/08/2017 165,000,000 11.25 -

SBBL003 01/06/2017 100,000,000 10.50 -

SBBL048 11/06/2015 175,000,000 10.70 -

SBBL056 13/06/2021 50,000,000 -

SCBB003 20/12/2020 50,000,000 10.50 -

SCBB006 12/05/2021 70,000,000 -

SCBB007 27/06/2022 50,000,000 -

SCBB008 27/06/2022 127,260,000 8.20 -

WU001 26/06/2018 195,000,000 10.65 -

WU002 26/06/2026 205,000,000 10.60 -

TOTAL 9,251,260,000 94,659,578

*The BW009 bond matured on September 11, 2013 and had a market capitalisation of P433,000,000 at maturity.

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MARKET STATISTICSTable 18: Bond Market Capitalization by Sector: 2013

Bonds MaturityDate IssueSize

Government

BW003 31/10/2015 1,642,000,000

BW005 12/09/2018 1,233,000,000

BW007 05/03/2025 1,295,000,000

BW008 08/09/2020 858,000,000

BW010 08/03/2017 618,000,000

BW011 10/09/2031 399,000,000

6,045,000,000

Quasi

DPCF004 02/06/2016 220,000,000

DPCF005 02/06/2019 100,000,000

DPCF006 02/06/2022 55,000,000

DPCF007 02/06/2025 35,000,000

410,000,000

Parastatals

BBS002 15/12/2016 115,000,000

BBS004 26/11/2019 75,000,000

BBS005 03/12/2023 150,000,000

BBS006 04/08/2018 110,000,000

BHC017 10/12/2017 286,000,000

BHC020 10/12/2020 103,000,000

BVI001 07/05/2018 70,000,000

BVI002 14/07/2015 50,000,000

NDB001 01/08/2017 165,000,000

WU001 26/06/2018 195,000,000

WU002 26/06/2026 205,000,000

1,524,000,000

Corporate

BBB001 30/10/2014 100,000,000

FML015 12/07/2015 50,000,000

FML025 23/10/2025 150,000,000

LHL005 08/11/2017 50,000,000

LHL006 08/11/2023 200,000,000

LHL007 08/11/2025 75,000,000

LHL008 08/11/2027 25,000,000

SBBL003 01/06/2017 100,000,000

SBBL048 11/06/2015 175,000,000

SBBL056 13/06/2021 50,000,000

SCBB003 20/12/2020 50,000,000

SCBB006 12/05/2021 70,000,000

SCBB007 27/06/2022 50,000,000

SCBB008 27/06/2022 127,260,000

1,272,260,000

TOTAL 9,251,260,000

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COMPANY STRATEGY

Only with rigorous planning and foresightcan we reach our targets””

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market development

product development

innovation

success

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BSE STRATEGY

1.1 INFRASTRUCTURE DEVELOPMENT • CSDimplementedinMay2008,followedby subsequentsharesdematerialisation• Dematerialisationofsharescontinuingsatisfactorily intheCSDSystem• ElectronicCSDaccountstatementslaunchedin2010• DematerialisationofbondsintotheCSDSystem commencedin2011• Morethan20,027investoraccountsopenedasatend ofDecember2013• Morethan59.3%ofdomesticcompanieswere dematerialisedasatendofDecember2013• AutomatedTradingSystem(ATS)wasimplementedin August2012• ATSwassuccessfullyupgradedinJune2013• DocumentationoftheITServiceCatalogueisin progress• Systemshavebeenimplementedtodisseminate onlineinformationtodatavendors• Upgradeofdesktopinfrastructure,ITAuditandre- implementationofpowerinfrastructureintheserver roomhasbeencompleted• DocumentationofITPolicies,Processesand Proceduresisinprogress• Implementationofadataminingsystemisinprogress

1.2 REGULATION

• Codeoncorporategovernanceforlistedcompanies implementedin2008• CSDrulesdraftedbyBSEandimplementedin2008• SettlementcycleoftransactionsintheBSEreduced fromT+5toT+4,andT+3effective2012• Strategiesimplementedtoimprovecomplianceby listedcompanies• CommitteeappointedbyMFDPtoreviewthedraft SecuritiesBillcompleteditsreviewandrecommended severalamendmentswhichhavenowbeen incorporatedintothedraftbill.TheSecurities

BillisexpectedtobepresentedtoParliamentinthe secondhalfof2014• EnactmentoftheSecuritiesBillwillenableBSEto proceedonseveraldevelopmentinitiativeswhichwill includethecorporatizationoftheBSE• ATSTradingRulesforDebtandEquityinstruments implementedin2012• TradingintheATSextendedbyonehoureffective4 Novemberin2013• Rulesformarketmakersandforshortsellingisin progress• Digitizationoflistingfilesisinprogress

1.3 MARKET DEVELOPMENT

• ImprovementsmadetoBSEpublications• SelectedBSEpublicationstranslatedintoSetswana• Seriesofroadshowsheldnationwidetoeducate generalpublicabouttheBSE• BSEalsoparticipatedatexhibitionsandfairsaroundthe country• Continuedawarenesscreationcampaignsconducted targetingretailinvestors• Commencedawarenesscreationonthelistingprocess targetedatcompanieswiththepotentialtolist• PromotedpublicityoftheBSEoperationsbyinviting thepublictoviewliveBSEtradingsessions• HeldConferencesandworkshopstomarketthe BSEbrand,productdevelopmentandstrategy.These conferencesare;CreatingWealthforBatswanain2007, ExchangeTradedFundsin2008,Securitisationandthe BondMarketin2008,CreditRatingWorkshopin2008.• Strategicallianceswithkeyinstitutionsfostered• PartneredwithBotswanaTelevisiontosponsorthe businesssegmentofthe“DailyBreakfastShow”• Partneredwiththemediabycontributingarticlesand takingpartinradioandtelevisiontalkshows• BSEconductingmarketperformancepresentations

1. PROGRESS ON THE BSE STRATEGY

TheBSEhasmadeprogressinachievingstrategicobjectivesasdetailedintheBSE’sstrategicplan.Asynopsisofprogresstodateisgivenbelow:

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onRB1programmesof“TseleleTsele”and“Sefalana SaPapadi”andtheRB2programmeof“Business Twighlight”everyyear• BSEconductingmarketperformancepresentationson BTVprogrammeof“FirstIssues”• BSEpublishedacartoonstripbooklettitled“Sheleng”• ATSsnippetsonYaRonaFMranafterATS implementationin• ETFssnippetsonYaRonaFMairedtoadvertiseETFs• InauguralBSESeniorSecondarySchoolsFinanceand InvestmentQuizin2013• IncreasedvisibilityoftheBSEbyputtingup7billboards invariousplacesinBotswanain2013• Re-vampingoftheBSEwebsitetostartin2014• CorporateSocialInvestmentinitiativesuccessfully undertakenwithadoptionoftwoprimaryschoolsin 2013;SebelePrimarySchoolandXakaoPrimarySchool• WorkingwithSassyDivaonthe‘DonateaPad’project undertheCSIinitiatives

1.4 PRODUCT DEVELOPMENT

• Seriesofindicesconstructedusing“totalreturn” methodology• Seriesofindicesbasedon“freefloat”constructed• Librarytoassistresearchestablished• StrategicAlliancesformedwithAbsaCapitalSA& NedbankCapitaltoimplementETFsintheBSE• DuallistedtheNewGoldExchangeTradedFundinJuly

2010inpartnershipwithAbsaCapital• NedbankCapitalmadeseveralpresentationstofund managers,brokersandotherinterestedpartiestoraise awareontheBettaBetaETFin2011• DuallistedtheBettabetaEquallyWeightedTop40ETF inMay2011inconjunctionwithNedbankCapital• Heldseveralmeetingswithstrategicpartnersto appraisethemoftheBSE’splanstointroduceContract forDifference(CFDs)• PartneredwithGeometricProgressionCCofSouth Africatoconductfinancialmarketcoursessince2010• BondMarketAssociationestablishedin2010,with representationfromseveralmarketparticipants• ConsolidatedtheBondMarketDevelopmentStrategy Paperin2011• BondMarketAssociationofficiallyregisteredwith theRegistrarofSocietiestobecomeafull-fledged Association• ConceptpapersonCFDsapprovedbyBSEBoard• Compiledaresearchpaperaimingatprovidingfindings andrecommendationsforpromotingthetrading, clearingandsettlementofgovernmentbonds throughtheBSEtoenhanceliquidity,pricediscovery andthedevelopmentofamarketdeterminedyield curve.• AmendedDebtListingandTradingRulesin2012• BSEcurrentlyrevisingDebtListingRequirements• Threebondindiceslaunchedin2013inconjunction withNedbankCapital• 3BondIndiceslaunchedin2013

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• HeldaworkshoponGlobalDepositoryReceipts(GDRs) andanotheroneonETFsin2013• BSEdraftedlistingrulesforGDRs• BrochuresforETFsanddebtinstrumentscompleted• Contractnegotiationwithinternationaldata vendorsfordisseminationoftradingdatasecured, negotiationswithotheron-going

1.5 ORGANISATION STRUCTURE AND HUMAN RESOURCE DEVELOPMENT

•Performanceappraisalsystemforstaffimplemented• BSEcontinuedtotrainstaffthroughworkshops, conferencesandcoursesonoperationsofthestock exchange• TheBSEcontinuestoofferinternshiptograduates underthegovernment’sinternshipprogramme• AprojectaboutevaluatingtheBSE’sorganisation structure,jobprofiles,HRpoliciesandprocedures,Code ofConductaswellassuccessionandretentionplans completedin2012• Internalauditfunctionimplemented• InternalAuditfunctionisbeingreviewedwiththe intentiontointernaliseitinfuture• Teambuildingexercisesbeingdoneannually• Staffwelfareandwellnessactivitieshosted

1.6 GOVERNANCE STRUCTURE

• BSEBoardCharteradopted• Differentiationbetween“independent”and“non independent”committeemembersmadeinthe constitutionofsub-committees

1.7 FINANCIAL RESOURCES

• BSEBoardCharteradopted• Differentiationbetween“independent”and“non- independent”committeemembersmadeinthe constitutionofsub-committees• BSEfeesontransactionsrationalisedtoreduce dependenceongovernmentsubventionaswellas rationalisationofexpenditurebybenchmarking againstotherexchanges• BSEStrategicplanreviewinprogressaimedat CommercialisationoftheExchange• Breakevenlevelsofturnoverandlevelofdependence ongovernmentcomputed• Implementationofactivitybasedmanagementsystems isinprogress

BSE STRATEGY

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It is only through theinteractionofthevariousstakeholders and eachappreciating the other’sresponsibilities that therequiredmomentumcanbecreated

REACHING NEW HEIGHTS

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CORPORATE GOVERNANCE2. BOARD SUB-COMMITTEES

2.1 Listings and Trading Sub-Committee

The Listings and Trading sub-committee sets policy andformulatesruleswithregardtolistingsandtradingmatters.Itapproveslistingapplicationsthatrequirespecialdispensationfrom the listing rules referred to them by the ExecutiveCommittee.

ThemembersoftheListingsandTradingsub-committeeare:

MEMBER ATTENDANCE

PatrickO’Flaherty 1/1

ReginaVaka* 1/1

KabeloMohohlo 1/1

GregoryMatsake 1/1*Appointed with effect from June 2013

2.2 Audit Sub-Committee

The Audit sub-committee assists the main committee indischarging itsdutiesrelatingtothesafeguardingofassets,theoperationofadequatesystems,controlprocessesandthepreparation of accurate financial reporting and statementsin compliance with all applicable legal requirements andaccountingstandards.

ThemembersoftheAuditsub-committeeare:

MEMBERS ATTENDANCE

IponengSennanyana 8/8

SelekaMokama* 2/5

ElainaGonsalves 6/8

GoitseoneKgaodi 1/8

GregoryMatsake 6/8* Term ended June 2013

1. Main Commitee

The Main Committee of the BSE established in terms of theBSEAct ismadeupof 3members appointedby theMinisterof Finance and Development Planning and a maximum of 6memberselectedbymemberbrokers,subjecttoamaximumof2personselectedfromanyonebrokingcompany.

The functions of themainCommittee are to set the strategicdirectionoftheBSEandtoensurethattheBSEisbeingmanagedinlinewithpoliciessetbythecommittee.The BSE Board for the year was constituted by the followingmembers:

MEMBER POSITION DATE AND PERIOD OF APPOINTMENT

Elected Members

PatrickO’Flaherty Chairperson Firstelectedin2010

MartinMakgatlhe* Member Firstelectedin1998

SelekaMokama* Treasurer Firstelectedin2008

KabeloMohohlo Member ElectedinMay2011

GregoryMatsake Treasurer ElectedinMay2012

GoitseoneKgaodi Member ElectedinMay2012

Appointed Members

IponengSennanyana

Member First appointed in2010

ElainaGonsalves Member Appointed inOctober2011

ReginaVaka** Vice-Chairperson Appointed in June2013

Prof.JohnKiggundu**

Member Appointed in June2013

* Term ended June 2013

**Appointed with effect from June 2013

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Thestridesmadein2013arejustaminisculerealizationofthelatentpotentialthatexistsforthedevelopmentof the capital market inBotswana.

REACHING NEW HEIGHTS

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2.3 Investigations and Disciplinary Sub-Committee

The Investigations and Disciplinary sub-committee hearscomplaintsmade against any broker or broking firm (tradingparticipant)referredtoitbytheBSEoranymemberofthepublicand determines its findings following a hearing; including, ifapplicable,pronouncementofsanctions.

The members of the Investigations and Disciplinary sub-committeeare:

MEMBERS ATTENDANCE

IponengSennanyana 1/1

Prof.JohnKiggundu* 0/0

ElainaGonsalves 1/1 *Appointed with effect from June 2013

2.4 Governance and Remuneration Sub-Committee

Governance and Remuneration sub-committee is responsibleforallmatters relating tocorporategovernanceandpracticesoftheBSE,nominationsofmemberstobeappointedtotheBSECommitteeandsub-committeesaswellastermsandconditionsofemploymentformanagementoftheBSE.

ThemembersofGovernanceandRemunerationsub-committeeare:

MEMBERS ATTENDANCE

ElainaGonsalves 8/8

IponengSennanyana 8/8

Prof.JohnKiggundu* 3/6*Appointed with effect from June 2013

2.5 Botswana Stock Exchange Security Fund Sub- Committee

Botswana Stock Exchange Security Fund was establishedto provide compensation for losses incurred under certaincircumstances by registered stockbrokers, employees orassociates and agents of registered stockbrokers or brokingmembers. The sub-committee is responsible for all mattersrelating to thegovernanceof the fundasoutlined in theBSEAct.

ThemembersoftheBSESecurityFundsub-committeeare:

MEMBERS ATTENDANCE

ElainaGonsalves 2/2

KabeloMohohlo 2/2

MartinMakgatlhe** 1/1

ReginaVaka* 0/1*Appointed with effect from June 2013

** Term ended June 2013

Members MainComm. Listings&Trading

Audit Invest.&Discip.

Gov.&Renum.

SecurityFund

BSEAGM

P.O’Flaherty 5/5 1/1 1/1

M.Makgatlhe** 0/0 1/1 0/1

E.Gonsalves 4/5 6/8 1/1 8/8 2/2 1/1

I.Sennanyana 5/5 8/8 1/1 8/8 1/1

G.Kgaodi 5/5 1/8 1/1

S.Mokama** 2/3 2/5 1/1

G.Matsake 5/5 1/1 6/8 1/1

K.Mohohlo 5/5 1/1 2/2 1/1

Prof.JohnKiggundu* 2/2 0/0 3/6 0/0

ReginaVaka* 2/2 1/1 0/1 0/0*Appointed with effect from June 2013

** Term ended June 2013

3. ATTENDANCE AT MEETINGS OF THE MAIN COMMITTEE AND SUB-COMMITTEES

COMMITTEEFEESTheBSEpaysMembersasittingallowancebasedontheratessetbyGovernment.

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FINANCIAl STATEMENTS

By purposefully planning for prosperity, we will achieve the greatness we aspire to””

StatementofMainCommittee’sresponsibilities 103

Reportoftheindependentauditors 104

Statementsofprofitorlossandothercomprehensiveincome 105

Statementsoffinancialposition 106

Statementsofchangesinequity 107

Statementsofcashflows 108

Accountingpolicies 109-116

Financialriskmanagement 117-120

Criticalaccountingestimatesandjudgments 121

Notestothefinancialstatements 122-129

Supplementary information

Detailedstatementofprofitorlossandothercomprehensiveincome 130

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TheMainCommitteeofBotswanaStockExchange (the“Exchange”) is responsible for thepreparationandfairpresentationof the

annualgroupfinancial statements, comprisingof theExchangeandgroup statementsoffinancialpositionat31December2013

andthestatementsofprofitorlossandothercomprehensiveincome,changesinequityandcashflowsforyearthenended,andthe

notestothefinancialstatements,whichincludeasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,in

accordancewithInternationalFinancialReportingStandards.

TheExchangemaintainssystemsofinternalcontrol,whicharedesignedtoprovidereasonableassurancethattherecordsaccurately

reflect its transactions and to provide protection against seriousmisuse or loss of company assets. TheMain Committee is also

responsibleforthedesign,implementation,andmaintenanceandmonitoringofthesesystemsofinternalfinancialcontrol.Nothing

hascometotheattentionoftheMainCommitteetoindicatethatanysignificantbreakdowninthefunctioningofthesesystemshas

occurredduringtheyearunderreview.

TheMainCommitteehasperformedanassessmentofthegroup’sabilitytocontinueasagoingconcernbasedonthegroup’sbudgets

andavailablecashresourcesandhavenoreasontobelievethatthegroupwillnotbeagoingconcernintheforeseeablefuture.

Theexternalauditorisresponsibleforreportingonwhethertheannualgroupfinancialstatementsarefairlypresentedinaccordance

withInternationalFinancialReportingStandards.TheexternalauditorshaveunrestrictedaccesstotheMainCommittee.

Thefinancialstatementssetoutonpages105to129andthesupplementaryinformationonpage130wereauthorisedforissueby

theMainCommitteeon25thApril2014andaresignedonitsbehalfby:

MEMBERMEMBER

STATEMENT OF THE MAIN COMMITEE’S RESPONSIBILITIES FOR THE YEAR ENDED 31 DECEMBER 2013

BOTSWANA STOCK EXCHANGE AND ITS SUBSIDIARY COMPANY

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BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

Independent Auditor’s Report

BOTSWANA STOCK EXCHANGE AND ITS SUBSIDIARY COMPANY

WehaveauditedtheconsolidatedandseparatefinancialstatementsofBotswanaStockExchange(the“Exchange”),whichcomprise

the statementsoffinancialpositionat31December2013and the statementsofprofitor lossandother comprehensive income,

changesinequityandcashflowsfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatory

notes,assetoutonpages105to129.

Main Committee’s responsibility for the financial statements

The Main Committee is responsible for the preparation and fair presentation of these financial statements in accordance with

International FinancialReportingStandards, and for such internal control as thecommitteedetermine isnecessary toenable the

preparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’s responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedourauditinaccordance

withInternationalStandardsonAuditing.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformthe

audittoobtainreasonableassurancewhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anaudit involvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosures inthefinancialstatements.

Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthe

financialstatements,whetherduetofraudorerror. Inmakingthoseriskassessments,weconsider internalcontrol relevanttothe

entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in

thecircumstances,butnot for thepurposeofexpressinganopinionontheeffectivenessof theentity’s internalcontrol.Anaudit

alsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadeby

management,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thefinancialstatementspresentatrueandfairviewoftheconsolidatedandseparatefinancialpositionofBotswana

StockExchangeat31December2013anditsconsolidatedandseparatefinancialperformanceandconsolidatedandseparatecash

flowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards.

KPMG

CertifiedAuditors

Gaborone

29April2014

Per:AGDevlin

Practisingmember:19960060.23

totheMembersoftheMainCommitteeoftheBotswanaStockExchange

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GROUP EXCHANGE Notes 2013 2012 2013 2012 P P P P

Revenue 1 24458305 21594964 19256442 19300420

Governmentsubvention 15(c) 9287768 7287770 5024868 3144970

Otherincome 31225 60277 31225 60164Income 33777298 28943011 24312535 22505554

Administrativeexpenses 2 (20364412) (15973014) (15239352) (11769185)

Operating profit 13412886 12969997 9073183 10736639

Financeincome 4 1451980 482158 1338901 452152Profit before income tax 14864866 13452155 10412084 11188521

Incometaxexpense 5 - - - -

Profitfortheyear 14864866 13452155 10412084 11188521

Othercomprehensiveincome - - - -

Total comprehensive incomefor the year 14864866 13452155 10412084 11188521

BOTSWANA STOCK EXCHANGE Annual Report 2013

STATEMENT OF PROFIT OR LOSS AND OTHER COMPRENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2013

BOTSWANA STOCK EXCHANGE AND ITS SUBSIDIARY COMPANY

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GROUP EXCHANGE Notes 2013 2012 2013 2012 P P P P

ASSETSNon-current assets

Plantandequipment 7 3215467 3294275 1464808 1453378 Investmentinsubsidiary 6 - - 100 100 3215467 3294275 1464908 1453478

Current assets Tradeandotherreceivables 8 3205173 3430302 2382052 7278726Taxrefundable 276603 276603 - -Moneymarketinvestments 9 30778128 17293236 27122895 17293236Cashandbankbalances 9 4250333 7297131 3536947 4904307 38510237 28297272 33041894 29476269

Total assets 41725704 31591547 34506802 30929747

EQUITY Capital and reserves Proprietaryrightscapital 10 5200 5200 5200 5200Rightspremium 777476 777476 777476 777476Retainedearnings 35567848 23396590 28505394 20786918

36350524 24179266 29288070 21569594

Non-current liabilities Deferredleaseliability 13 147838 70529 147838 70529

Current liabilities Tradeandotherpayables 11 2533734 3208737 2377286 5156609AmountsduetotheBotswanaStock ExchangeSecurityFund 12 2693608 4021776 2693608 4021776Bankoverdraft 9 - 111239 - 111239 5227342 7341752 5070894 9289624

Total equity and liabilities 41725704 31591547 34506802 30929747

BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2013

BOTSWANA STOCK EXCHANGE AND ITS SUBSIDIARY COMPANY

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Proprietary Rights Retained Total Rights Premium Income Capital P P P P

Year ended 31 December 2012Balanceat1January2012 5200 777476 13966211 14748887Previouslyreportedprofitfortheyear - - 13452155 13452155TransfertotheBotswanaStockExchangeSecurityFund(note12) - - (4021776) (4021776)

Balance at 31 December 2012 5200 777476 23396590 24179266

Year ended 31 December 2013Balanceat1January2013 5200 777476 23396590 24179266Profitfortheyear - - 14864866 14864866TransfertotheBotswanaStockExchangeSecurityFund(note12) - - (2693608) (2693608)

Balance at 31 December 2013 5200 777476 35567848 36350524

EXCHANGE

Year ended 31 December 2012 Balanceat1January2012 5200 777476 13620173 14402849Profitfortheyear - - 11188521 11188521TransfertotheBotswanaStockExchangeSecurityFund(note12) - - (4021776) (4021776)

Balance at 31 December 2012 5200 777476 20786918 21569594

Year ended 31 December 2013Balanceat1January2013 5200 777476 20786918 21569594Profitfortheyear - - 10412084 10412084TransfertotheBotswanaStockExchangeSecurityFund(note12) - - (2693608) (2693608)

Balance at 31 December 2013 5200 777476 28505394 29288070

IntermsoftheBotswanaStockExchangeAct,1994,section72(3),theExchangeisrequiredtotransferannually,thegreaterofP5000orhalfofitsannualprofittotheBotswanaStockExchangeSecurityFund(note12).

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013

BOTSWANA STOCK EXCHANGE AND ITS SUBSIDIARY COMPANY

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GROUP EXCHANGE Notes 2013 2012 2013 2012 P P P P

Cash flows from operating activitiesCashgeneratedfromoperations 14 14076821 12649974 11724114 10614986

Provisionaltaxpayments - (276603) - -

Cash generated from operating activities 14076821 12373371 11724114 10614986

Cash flows from investing activitiesPurchaseofproperty,plantandequipment 7 (957692) (2474852) (467701) (470930)Interestreceived 4 1451980 482158 1338901 452152

Net cash used investing activities 494288 (1992694) 871200 (18778)

CashflowsfromfinancingactivitiesAmountspaidtoBotswanaStockExchangeSecurityFund 12 (4021776) (1762563) (4021776) (1762563)

Net cash used in financing activities (4021776) (1762563) (4021776) (1762563)

Increase in cash and cash equivalents 10549333 8618114 8573538 8833645Cashandcashequivalentsatbeginningofyear 24479128 15861014 22086304 13252659

Cash and cash equivalents at the end of year 9 35028461 24479128 30659842 22086304

Cash and cash equivalents comprise:-Cashonhandandcashatbank 4250333 7297131 3536947 4904307-Moneymarketinvestments 30778128 17293236 27122895 17293236-Bankoverdraft - (111239) - (111239)

35028461 24479128 30659842 22086304

STATEMENTS OF CASHFLOWSFOR THE YEAR ENDED 31 DECEMBER 2013

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Reporting entity

BotswanaStockExchangeisinvolvedintheregulationandpromotionoflistinganddealingofsharesandothersecuritieslistedontheStockExchange.Theprincipalaccountingpoliciesappliedinthepreparationofthesegroupfinancialstatementsaresetoutbelow.Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.

Basis of preparation

StatementofcomplianceThe financial statements have been prepared in accordancewith IFRS and its interpretations adopted by the InternationalAccountingStandardsBoard(“IASB”).

Basisofmeasurement

Thefinancialstatementsarepreparedonahistoricalcostsbasis.

Functionalandpresentationcurrency

Thegroup’sfinancialstatementsarepresentedinPula,whichisthegroup’sfunctionalcurrency.

Useofestimatesandjudgements

ThepreparationoffinancialstatementsinconformitywithIFRSrequirestheuseofcertaincriticalaccountingestimates.Italsorequiresmanagementtoexerciseitsjudgementintheprocessofapplyingthegroup’saccountingpolicies.Theareasinvolvingahigherdegreeofjudgementorcomplexity,orareaswhereassumptionsandestimatesaresignificanttothegroup’sfinancialstatementaredisclosedinthe“Criticalaccountingestimatesandassumptions”sectionofthesefinancialstatements.

Estimatesandjudgmentsarecontinuallyevaluatedbasedonhistoricalexperienceandotherfactors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.

New standards and interpretations not yet effective

Thefollowingnewstandards,amendmentstostandardsandinterpretationsarenotyeteffectivefortheyearended31December2013,andhavenotbeenappliedinpreparingthesefinancialstatements.

Amendments to IAS 32 Financial Instrument, Presentation: Offsetting financial assets and financial liabilitiesTheseamendmentsclarifywhenanentitycanoffsetfinancialassetsandfinancialliabilities.Theseamendments,whichbecomeeffectivefortheentity’s2014financialstatements,withearlyadoptionpermitted,arenotexpectedtohaveanyimpactonitsfinancialstatements.Amendments to IFRS 10, IFRS 12 and IAS 27: Investment entitiesTheseamendmentsclarifythataqualifyinginvestmententityisrequiredtoaccountforinvestmentsincontrolledentities,aswellasinvestmentsinassociatesandjointventures,atfairvaluethroughprofitorloss.Theonlyexceptionwouldbesubsidiariesthatareconsideredanextensionoftheinvestmententity’sinvestmentactivities.Theconsolidationexemptionismandatoryandnotoptional.

Theseamendments,whichbecomeeffectivefortheentity’s2014financialstatements,withearlyadoptionpermitted,arenotexpectedtohaveanyimpactonitsfinancialstatements.

AmendmentstoIAS36:Recoverableamountdisclosuresfornon-financialassetsTheseamendmentsreversetheunintendedrequirementinIFRS13FairValueMeasurementtodisclosetherecoverableamountofeverycash-generatingunittowhichsignificantgoodwillorindefinite-livedintangibleassetshavebeenallocated.Undertheseamendments,therecoverableamountisrequiredtobedisclosedonlywhenanimpairmentlosshasbeenrecognisedorreversed.

1.

2.

2.1

2.2

2.3

2.4

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Theseamendments,whichbecomeeffectivefortheentity’s2014financialstatements,withretrospectiveadjustmentsforperiodscommencing1January2014andearlyadoptionpermitted,arenotexpectedtohaveanyimpactonitsfinancialstatements.

IFRIC 21 LeviesLevieshavebecomemorecommoninrecentyears,withgovernmentsinanumberofjurisdictionsintroducingleviestoraiseadditionalincome.Currentpracticeonhowtoaccountfortheseleviesismixed.IFRIC21providesguidanceonaccountingforleviesinaccordancewithIAS37Provisions,ContingentLiabilitiesandAssets.Thisinterpretation,whichbecomeseffectivefortheentity’s2014financialstatements,withretrospectiveadjustmentsforperiodscommencing1January2014,isnotexpectedtohaveanyimpactonitsfinancialstatements.

Amendments to IAS 39: Novation of derivatives and continuation of hedge accountingIAS39FinancialInstruments:RecognitionandMeasurementrequiresanentitytodiscontinuehedgeaccountingifthederivativehedginginstrumentisnovatedtoaclearingcounterparty,unlessthehedginginstrumentisbeingreplacedaspartoftheentity’soriginaldocumentedhedgingstrategy.

TheseamendmentsaddalimitedexceptiontoIAS39,toproviderelieffromdiscountinganexistinghedgingrelationship,whenanovationwasnot contemplated in theoriginalhedgingdocumentationmeets specific criteria.Theseamendments,whichbecomeeffectivefortheentity’s2014financialstatements,withretrospectiveadjustmentsforperiodscommencing1January2014andearlyadoptionpermitted,arenotexpectedtohaveanyimpactonitsfinancialstatements.

Amendments to IAS 19: Defined benefit plans: Employee contributionsTheseamendments introducerelief thatwill reducethecomplexityandburdenofaccountingforcertaincontributions fromemployeesorthirdparties.Suchcontributionsareeligibleforpracticalexpedientiftheyare:

• setoutintheformaltermsoftheplan;

• linkedtoservice;and

• independentofthenumberofyearsofservice.

Whencontributionsareeligible for thepracticalexpedient, anentity ispermitted (butnot required) to recognise themasareductionoftheservicecostintheperiodinwhichtherelatedserviceisrendered.Ifanentitywithadefinedbenefitplanthatrequiresemployeestocontributetotheplanchoosestoapplythisamendment,theentitywillrecognisethecontributionsasreductionoftheservicecostsintheperiodinwhichtherelatedserviceisrendered.Thisamendmentwhichbecomeseffectivefor theentity’s2015financial statements,with retrospectiveadjustments forperiodscommencing1 January2015andearlyadoptionpermitted,isnotexpectedtohaveanyimpactonitsfinancialstatements.

IFRS 9: Financial instrumentsIFRS 9 (2009) introduces new requirements for the classification andmeasurement of financial assets. Under IFRS 9 (2009),financialassetsareclassifiedandmeasuredbasedonthebusinessmodelinwhichtheyareheldandthecharacteristicsoftheircontractualcashflows.IFRS9(2010)introducesadditionsrelatingtofinancialliabilities.TheIASBcurrentlyhasanactiveprojecttomakelimitedamendmentstotheclassificationandmeasurementrequirementsofIFRS9andaddnewrequirementstoaddresstheimpairmentoffinancialassetsandhedgeaccounting.

TheeffectivedateofIFRS9was1January2015.Theeffectivedatehasbeenpostponedandanewdateisyettobespecified.Theentitywilladoptthestandardinthefirstannualperiodbeginningonorafterthemandatoryeffectivedate(oncespecified).TheimpactoftheadoptionofIFRS9hasnotyetbeenestimatedasthestandardisstillbeingrevisedandimpairmentandmacro-hedgeaccountingguidanceisstilloutstanding.

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4.

5.

6.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Exchange and entities controlled by theExchange(itssubsidiaries)(collectivelyreferredtoasthe“Group”).

TheGroupcontrolsasentitywhenitisexposedto,orhasrightsto,variablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaffectthesereturnsthroughitspowerovertheentity.Subsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtothegroup.Theyarede-consolidatedfromthedatethatcontrolceases.

Thegroupappliestheacquisitionmethodtoaccountforbusinesscombinations.Theconsiderationtransferredfortheacquisitionofasubsidiaryisthefairvaluesoftheassetstransferred,theliabilitiesincurredtotheformerownersoftheacquireeandtheequityinterestsissuedbythegroup.Theconsiderationtransferredincludesthefairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangement.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate.

Thegrouprecognisesanynon-controllinginterestintheacquireeonanacquisition-by-acquisitionbasis,eitheratfairvalueoratthenon-controllinginterest’sproportionateshareoftherecognisedamountsofacquiree’sidentifiablenetassets.

TheExchangecontrolstheCentralSecuritiesDepositoryCompanyofBotswanaLimited,whichisacompanyregisteredintheRepublicofBotswana.

Plant and equipment

Itemsofplantandequipmentaremeasuredathistoricalcostlessaccumulateddepreciationandimpairmentslosses.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheassets.

SubsequentexpenditurerelatingtoanitemofplantandequipmentiscapitalizedonlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeuseoftheassetwillflowtotheCompanyanditscostcanbemeasuredreliably.AllothersubsequentexpenditureisrecognisedasanexpenseintheStatementofprofitorlossandothercomprehensiveincomeasincurred.

Depreciationisbasedoncostofanassetlessitsresidualvalue.Depreciationonassetsiscalculatedusingthestraight-linemethodovertheirestimatedusefullivesasfollows:

Leaseholdimprovements thelowerofperiodofleaseandtenyearsOfficeequipment 4-10yearsMotorvehicles 3-5yearsFurnitureandfittings 8-10years

Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,ateachstatementoffinancialpositiondate.When the carrying amount of the assets exceeds its recoverable amount, the carrying value of the asset is adjusted to itsrecoverableamountthroughtheStatementofprofitorlossandothercomprehensiveincome.

GainsandlossesondisposalsaredeterminedbycomparingthedisposalproceedswiththecarryingamountandarerecognisedintheStatementofprofitorlossandothercomprehensiveincome.

Foreign currency translation

Transactionsincurrenciesotherthanthegroup’sfunctionalcurrency(Pula)arerecordedattherateofexchangeprevailingatthetimeofthetransaction.Monetaryassetsandliabilitiesinothercurrenciesaretranslatedatratesofexchangerulingattheendofthefinancialyear.ExchangegainsorlossesarisingontranslationarerecognisedintheStatementofprofitorlossandothercomprehensiveincomeexceptinthecaseofexchangegainsorlossesinrespectofforeignfinancingspecificallyarrangedforcapitalprojectswheredifferencesareincludedinthecostsoftheassetsconcerneduntilthecommissioningofsuchassets.

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Cash and cash equivalents

Cashandcashequivalentsincludescashinhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessandbankoverdrafts.Bankoverdraftsareshownwithinthecurrentliabilitiesonthestatementoffinancialposition.

Trade and other receivables

Tradereceivablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,lessprovisionforimpairment.

Aprovisionforimpairmentoftradereceivablesisestablishedwhenthereisobjectiveevidencethatthegroupwillnotbeableto collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor,probabilitythatthedebtorwillenterbankruptcyorfinancialreorganisation,anddefaultordelinquencyinpayments(morethan30daysoverdue)areconsideredindicatorsthatthetradereceivableis impaired.Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount,andtheamountofthelossisrecognisedintheStatementofprofitorlossandothercomprehensive incomewithin‘administrativeexpenses’.Whena trade receivable isuncollectible, it iswrittenoffagainst theadministrative account for trade receivables. Subsequent recoveries of amounts previously written off are credited against‘administrativeexpenses’intheStatementofprofitorlossandothercomprehensiveincome.

Trade and other payables

Tradepayablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffective interestmethod.

Provisions

Provisionsarerecognisedwhenthegrouphasapresentobligation(legalorconstructive)asaresultofapastevent,itisprobablethatanoutflowofresourceswillberequiredtosettletheobligation,andareliableestimateoftheamountoftheobligationcanbemade.

Employee benefits

Adefinedcontributionplanisapensionplanunderwhichthegrouppaysfixedcontributionsintoaseparateentity(afund)andwillhavenolegalorconstructiveobligationstopayfurthercontributionsifthefunddoesnotholdsufficientassetstopayallemployeesbenefitsrelatingtoemployeeserviceinthecurrentandpriorperiods.

ThegrouppayscontributionstoGlenrandMIB(Botswana)(Proprietary)Limited,whoadministersapensioninsuranceplanforthegroup.TheregularcontributionsarerecognisedintheStatementofprofitorlossandothercomprehensiveincomeorlossasincurred.

Employeeentitlementstoannualleaveandgratuityarerecognisedwhentheyaccruetoemployeesandaprovisionismadefortheestimatedliabilityasaresultofservicesrenderedbyemployeesuptothestatementoffinancialpositiondate.Contractstaffarepaidterminalgratuitiesinaccordancewiththeirrespectiveemploymentcontract.

Taxation

ThegroupisexemptfromincometaxationinaccordancewithparagraphXVofpart1ofthesecondscheduletotheIncomeTaxAct(Chapter52.01).CentralSecuritiesDepositoryCompanyofBotswanaLimitedreceiveditstaxexemptioncertificatein2013fromBotswanaUnifiedRevenueServices(“BURS”).BURShasconcurredtocancelallincometaxassessmentspreviouslyissuedtotheCompanyandrefundtaxpaidtodate.Consequenttotheprecedingexplanation,noprovisionforcurrentanddeferredtaxationhavebeenrecognisedinthefinancialstatements.

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13.

14.

15.

16.

.

Proprietary rights

Proprietaryrightscapitalisrecognisedatthefairvalueoftheconsiderationreceivedbythegroup

Botswana Stock Exchange Security Fund

IntermsoftheBotswanaStockExchangeAct,1994(Section77(3)),theExchangeisrequiredtotransferincashorsecuritiestotheBotswanaStockExchangeSecurityFund,thegreaterofhalfoftheExchange’sprofitsandP5000onanannualbasis.

Forthepurposeofthistransfer,profitsexcludeanydonations,grantorotherfinancialsupportreceivedfromtheGovernmentofBotswana.

Leases

Leases of assetswhere the lessor retains all the risks and rewards of ownership are classified as operating leases. Paymentsmadeunderoperatingleasesarechargedtotheincomestatementonastraight-linebasisovertheperiodofthelease.Whenanoperatingleaseisterminatedbeforetheleaseperiodhasexpired,anypaymentrequiredtobemadetothelessorbywayofpenaltyisrecognisedasanexpenseintheperiodwhichterminationtakesplace.

Leasesofproperty,plantandequipmentwherethegroupassumessubstantiallyallrisksandrewardsofownershipareclassifiedasfinanceleases.Financeleasesarecapitalisedatvaluesunderlyingestimatedpresentvalueoftheleasepayments.Eachleasepaymentisallocatedbetweentheliabilityandfinancechargestoachieveaconstantrateonthefinancebalanceoutstanding.Theinterestischargedtotheincomestatementovertheperiodofthelease.Theassetisdepreciatedoveritsusefullife.

Revenue recognition

Revenuecomprisestheinvoicedvalueforservicesrendered,netofvalueaddedtax.Thefollowingspecificrecognitioncriteriaisadoptedforthespecificrevenuestream:

Botswana Stock exchange feesIn termsof theBotswanaStockExchangeMembersRules,0.12%-0.15%of the transactionvalue for tradeson theStockExchangeisduetotheExchange.Revenueisrecognisedontradingdateunlesscollectabilityisindoubt.

InterestInterestrevenueisaccruedbyreferencetotheprincipaloutstandingandattheeffectiveinterestrateapplicable,whichistheratethatexactlydiscountsestimatedfuturecashreceiptsthroughtheexpectedlifeofthefinancialassettothatasset’snetcarryingamountoninitialrecognition.

Listing feesListingfeesanddocumentationfeesarebilledasandwhentheservicesareprovided.Revenueisrecognisedoninvoicingoronlistingoftherelevantsecurity.

Annual sustaining feesAnnualsustainingfeeisrecognisedonatimeproportionbasisunlesscollectionisindoubt.

Member feesAnnualmember/dealerfeesareinvoicedinadvancefortheyearunlesscollectionisindoubt.

Central Securities Depository (CSD) feesCSDfeeischargedonthetransactionvalue(forboththebuyerandtheseller)whichischargedat0.1%onthetransactionvalue.Revenueisrecognisedonthetradingdateunlesscollectabilityisindoubt.

Other incomeRevenueisrecognisedonanaccrualbasisinaccordancewiththesubstanceoftheunderlyingtransaction.

I.

II.

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IV.

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17.

18.

Government subvention

MonetaryGovernmentsubventionsarerecognisedattheirfairvaluewherethereisreasonableassurancethatthecompanywillcomplywithallattachedconditions.GrantsrelatingtocostsaredeferredandrecognisedintheStatementofprofitorlossandothercomprehensiveincomeovertheperiodnecessarytomatchthemwiththecoststheyareintendedtocompensate.

Non-monetarysubventionsarerecognisedatnominalamounts incurredtoobtainsuchsubventions.Thegroupdoesnotowntheautomatedtradingsystemusedinitsoperations.ThesoftwarehasbeenprovidedbythegovernmentofBotswanaatnocost.Financial instrumentsFinancialassetsandliabilitiesarerecognisedonthegroup’sstatementoffinancialpositionwhenthegroupbecomespartytothecontractualprovisionsofinstrumentsasfollows:

Financial assetsFinancialassetsareclassifiedintothefollowingspecifiedcategories:financialassetsas‘atfairvaluethroughprofitorloss’,‘held-to-maturityinvestments’,‘available-for-sale’financialassetsand‘loansandreceivables’.Theclassificationdependsonthenatureandpurposeofthefinancialassetsanddeterminedatthetimeofinitialrecognition.

-Financialassetsatfairvaluethroughprofitorlossarestatedatfairvalue,withanyresultantgainorlossrecognisedinprofitorloss.Thenetgainorlossrecognisedinprofitorlossincorporatesanydividendorinterestearnedonthefinancialassets.-Held-to-maturity investments are recorded at amortised cost using the effective interestmethod less impairment,withrevenuerecognisedonaneffectiveyieldbasis.-Available-for-salefinancialassetsarenon-derivativesthatareeitherdesignatedinthiscategoryornotclassifiedinanyoftheothercategories.Theyareincludedinnon-currentassetsunlessmanagementintendstodisposeoftheinvestmentwithin12monthsofthestatementoffinancialposition.-Loansandreceivablesareinitiallyrecognisedatfairvalueandsubsequentlymeasuredatamortizedcost.Provisionismade,whereintheopinionofthedirectors,animpairmentinvaluehasoccurred.

Financial liabilitiesFinancialliabilitiesareclassifiedaseitherfinancialliabilitiesatfairvaluethroughprofitorlossorotherfinancialliabilities.

Financialliabilitiesatfairvaluethroughprofitorlossarestatedatfairvalue,withanyresultantgainorlossrecognisedinprofitorloss.Thenetgainorlossrecognisedinthestatementofprofitorlossandothercomprehensiveincomeincorporatesanyinterestpaidonthefinancialliability.

Otherfinancialliabilities,includingborrowings,areinitiallymeasuredatfairvalue,netoftransactioncosts.Otherfinancialliabilities are subsequently measured at amortized cost using the effective interest method, with the interest expenserecognisedonaneffectiveyieldbasis.

Fair value hierarchyThegroupmeasuresfairvaluesusingthefollowingfairvaluehierarchywhichreflectsthesignificanceoftheinputsinmakingthemeasurements:

Level1:Quotedmarketpriceinanactivemarketforanidenticalinstrument.

Level2:Valuationtechniquesbasedonobservableinputs,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices).Thiscategoryincludesinstrumentsvaluedusingquotedmarketpricesinactivemarketsforsimilarinstruments;quotedpricesforidenticalorsimilarinstrumentsinmarketsthatareconsideredlessthanactive;orothervaluationtechniqueswhereallsignificantinputsaredirectlyorindirectlyobservablefrommarketdata.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where thevaluationtechniqueincludesinputsnotbasedonobservabledataandtheunobservableinputshaveasignificanteffectontheinstrument’svaluation.Thiscategoryincludesinstrumentsthatarevaluedbasedonquotedpricesforsimilarinstrumentswheresignificantunobservableadjustmentsorassumptionsarerequiredtoreflectdifferencesbetweentheinstruments.

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GROUP 2012

2012 Total Amortised cost Current Non-current

ASSETS

Property,plantandequipment 3294275 - - - 3294275 - 3294275Taxationrefundable 276603 - 276603 - - 276603 -Tradeandotherreceivables 3430302 - 3430302 - - 3430302 -Moneymarketinvestment 17293236 - 17293236 - - 17293236 -Cashandbankbalances 7297131 - 7297131 - - 7297131 - 31591547 - 28297272 - 3294275 28297272 3294275

LIABILITIESAmountduetoBSESecurityFund 4021776 - - 4021776 - 4021776 -Tradeandotherpayables 3208737 - - 3208737 - 3208737 -Deferredleaseliability 70529 - - - 70529 - 70529Bankoverdraft 111239 - 111239 - - 111239 - 7412281 - 111239 7230513 70529 7341752 70529

At fair value through

profit andloss

Loans and receivables

Financial assets and liabilities Current/non-current

Non-financial

instruments

GROUP 2013

2013 Total Amortised cost Current Non-current

ASSETS

Property,plantandequipment 3215467 - - - 3215467 - 3215467Taxationrefundable 276603 - 276603 - - 276603 -Tradeandotherreceivables 3205173 - 3205173 - - 3205173 -Moneymarketinvestment 30778128 - 30778128 - - 30778128 -Cashandbankbalances 4250333 - 4250333 - - 4250333 - 41725704 - 38510237 - 3215467 38510237 3215467

LIABILITIESAmountduetoBSESecurityFund 2693608 - - 2693608 - 2693608 -Tradeandotherpayables 2533734 - - 2533734 - 2533734 -Deferredleaseliability 147838 - - - 147838 - 147838 5375180 - - 5227342 147838 5227342 147838

Financial assets and liabilities Current/non-current

Non-financial

instruments

At fair value through

profit andloss

Loans and receivables

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EXCHANGE 2013

2013 Total Amortised cost Current Non-current

ASSETS

Property,plantandequipment 1464808 - - - 1464808 - 1464808Investmentinsubsidiaries 100 - - - 100 - 100Tradeandotherreceivables 2382052 - 2382052 - - 2382052 -Moneymarketinvestment 27122895 - 27122895 - - 27122895 -Cashandbankbalances 3536947 - 3536947 - - 3536947 - 34506802 - 33041894 - 1464908 33041894 1464908

LIABILITIES Tradeandotherpayables 2377286 - - 2377286 - 2377286 -AmountduetoBSESecurityFund 2693608 - - 2693608 - - 2693608Deferredleaseliability 147838 - - - 147838 - 147838

5218732 - - 5070894 147838 2377286 2841446

At fair value through

profit andloss

Loans and receivables

Financial assets and liabilities Current/non-current

Non-financial

instruments

EXCHANGE 2012

2012 Total Amortised cost Current Non-current

ASSETS

Property,plantandequipment 1453378 - - - 1453378 - 1453378Investmentinsubsidiary 100 - - - 100 - 100Tradeandotherreceivables 7278726 - 7278726 - - 7278726 -Moneymarketinvestment 17293236 - 17293236 - - 17293236 -Cashandbankbalances 4904307 - 4904307 - - 4904307 - 30929747 - 29476269 - 1453478 29476269 1453478

LIABILITIES Tradeandotherpayables 5156609 - - 5156609 - 5156609 -AmountduetoBSESecurityFund 4021776 - - 4021776 - - 4021776Bankoverdraft 111239 - 111239 - - - -Deferredleaseliability 70529 - - - 70529 70529 -

9360153 - 111239 9187385 70529 5227138 4021776

At fair value through

profit andloss

Loans and receivables

Financial assets and liabilities Current/non-current

Non-financial

instruments

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OverviewThegrouphasexposure tocredit risk, liquidity risk, interest rate riskandmarket risk thatarises in thenormalcourseof thegroup’sbusiness.Thisnotepresentsinformationaboutthegroup’sexposuretoeachoftheserisks,thegroup’sobjectives,policiesandprocessesformeasuringandmanagingtheserisks,andthegroup’smanagementofcapital.Furtherquantitativedisclosuresareincluded.

TheMainCommitteehaveoverallresponsibilityfortheestablishmentandoversightofthegroup’sriskmanagementframework.

Thegroup’sriskmanagementpoliciesareestablishedtoidentifyandanalysetherisksfacedbythegroup,tosetappropriaterisklimitsandcontrols, and tomonitor risksandadherence to limits.Riskmanagementpoliciesandsystemsare reviewed regularly to reflectchangesinmarketconditionsandthegroup’sactivities.

TheMainCommitteeoverseehowmanagementmonitorscompliancewiththegroup’sriskmanagementpoliciesandproceduresandreviewstheadequacyoftheriskmanagementframeworkinrelationtotherisksfacedbythegroup.

Thefollowingtableindicatesthecarryingandfairvaluesoffinancialinstrumentsatthereportingdate:

GROUP EXCHANGE 2013 2012 2013 2012 P P P P

Financial assets

Tradereceivables 537574 1323610 512810 1249482Otherreceivables 84127 81774 84127 81774Receivablesfromrelatedparty 2322391 1821943 1583745 5762870Cashandcashequivalents 35028461 24479128 30659842 22086304 37972553 27706455 32840524 29180430

Financial liabilities

Tradeandotherpayables 2533734 3208737 2377286 5156609

Credit riskThegrouphasexposuretocreditrisk,whichistheriskthatacounterpartywillbeunabletopayamountsinfullwhendue.Keyareaswherethegroupisexposedtocreditriskare:-amountsduefromgroupcompanies,-amountsduefromtradeandotherreceivables,and-investmentsincashandcashequivalents.

Exposuretothirdpartiesismonitoredaspartofthecreditcontrolprocess.Themaximumexposuretocreditriskispresentedbythecarryingamountofeachfinancialassetinthestatementoffinancialposition.Reputablefinancialinstitutionsareusedforinvestingandcashhandlingpurposes.Allmoneymarketinstrumentsandcashequivalentsareplacedwithfinancial institutions registered inBotswana.Banks inBotswanaarenot ratedbuteachof thebanksconcernedaresubsidiariesofmajorSouthAfricanregisteredinstitutionsandareregulatedbyBankofBotswana.

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Exposure to credit riskThecarryingamountoffinancialassetsrepresentsthemaximumcreditexposure.Themaximumexposuretocreditriskatthereportingdateisanalysedasfollows:

GROUP EXCHANGE 2013 2012 2013 2012 P P P PReceivablefromrelatedparty 2322391 1821943 1583745 5762870Tradeandotherreceivables 621701 1405384 596937 1331256Cashandcashequivalents 35028461 24479128 3065984222086304

37972553 27706455 32840524 29180430

Noimpairmentwasrecognisedasthetradeandrelatedpartyreceivablesbalancewerereceivedinfullsubsequenttothereportingdate.Thisisconsistentwiththepriorperiod.

GROUP 31-Dec-13 31-Dec-12 Credit Credit Counterparty Rating limit Balance limit Balance P P

BarclaysBankofBotswana N/A N/A 2362595 N/A 1232166StandardCharteredBank N/A N/A 1816342 N/A 6062465StanlibInvestmentManagementServices N/A N/A 12125147 N/A 17293236AfricanAllianceAssetManagement N/A N/A 18652981 N/A -

EXCHANGE Counterparty

BarclaysBankofBotswana N/A N/A 2362595 N/A 1232166StandardCharteredBank N/A N/A 1102956 N/A 3669641StanlibInvestmentManagementServices N/A N/A 12125147 N/A 17293236AfricanAllianceAssetManagement N/A N/A 14997748 N/A -

Nocreditlimitswereexceededduringthereportingperiod,andmanagementdoesnotexpectanylossesfromnon-performancebythesecounterparties.TherearenocreditratingsavailableinBotswana.Thefairvalueapproximatestheircarryingamounts.

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Carrying amountdue within 6

months

Carrying amountdue within 6

months

Contractualcash-flows

Contractualcash-flows

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Liquidityrisk

Liquidityriskistheriskthatthegroupwillnotbeabletomeetitsfinancialobligationsastheyfalldue.Thegroup’sapproachtomanagingitsliquidityistoensure,asfaraspossible,thatithassufficientliquidfundsavailabletomeetitsliabilitieswhendue,bothundernormalandadverseeconomicconditions,withoutincurringunacceptablelossesorriskingdamagetoitsreputation.

Thegroupensuresthatithassufficientcashondemandtomeetitsexpectedoperationalexpensesforaperiodof30days,includingthe servicingofanyfinancialobligations.Thisexcludes thepotential impactofextremecircumstanceswhichcannotbe reasonablypredicted,forexamplenaturaldisasters.

Thematurityprofileofthegroup’sfinancialliabilitiesbasedoncontractualcashflowissummarisedasfollows:

GROUP EXCHANGE 2013

Tradeandotherpayables 2533734 2533734 2377286 2377286

2012

Tradeandotherpayables 3208737 3208737 5156609 5156609

Interest rate risk

Financialinstrumentssubjecttovariableinterestratesconsistsofpositivecashbalancesheldwithfinancialinstitutions.InterestratesapplicabletothesebalancesfluctuatewithmovementsintheBotswanaprimelendingrates,andarecomparablewithratescurrentlyavailableinthemarket.Thegroup’svariableinterestratesinstrumentsareanalysedasfollows:

GROUP EXCHANGE 2013 2012 2013 2012Variablerateinstruments

Moneymarketinvestment 30778128 17293236 27122895 17293236

Theaverageinterestratesperannumapplicabletothesefinancialinstruments

5.17% 5.61% 5.17% 5.61%

Achangeof50basispointsininterestratesduringthereportingperiodwouldhaveincreased/(decreased)therespectivegroup’sandexchange’sprofitbeforetaxationasfollows:

Increaseof50basispointsMoneymarketinvestment 153891 86466 135614 86466

Decreaseof50basispointsMoneymarketinvestment (153891) (86466) (135614) (86466)

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Market risk

TheGroupprimaryrevenueisfixedintermsoftheBotswanaStockExchangeAct,1994andthelistingandtradingrulesandisthereforenotsignificantlysusceptibletomarketrisk.

Capital risk management

Thegroup’sobjectiveswhenmanagingcapitalaretosafeguarditsabilitytocontinueasagoingconcerninordertoperformthemandateforwhichitwascreatedandbenefitsforotherstakeholdersandtomaintainanenvironmentoftransparencyforlistedcompanies,thepublicanditsstakeholders.Thegrouphadnoborrowingsduringtheyearsended31December2012and31December2013.ThegroupisownedandsupportedbyGovernmentofBotswanawhoprovidesthenecessarysupporttosustaintheoperationsofthegroup.

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Estimatesandjudgmentsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.

Thegroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,rarelyequaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyearareoutlinedbelow:

Useful lives and residual values for plant and equipment

Thegrouptestsannuallywhether,theusefullifeandresidualvalueestimateswereappropriateandinaccordancewithitsaccountingpolicy.Residualvaluesofcomputers,plantandequipmentandmotorvehiclesarebasedoncurrentestimatesofthevalueoftheseassetsattheendoftheirusefullives.Theestimateresidualvaluesofmotorvehicleshavebeendeterminedbymanagementbasedontheirknowledgeoftheindustry.

Impairment of receivables

ThegroupfollowstheguidanceofIAS39todeterminewhenareceivableisimpaired.Thisdeterminationrequiressignificantjudgement.Inmaking this judgement, thegroupevaluates, amongother factors, significant financial difficultiesof thedebtor, probability thatthedebtorwillenterbankruptcyanddefaultordelinquencyinpayments,includingfactorssuchasindustryandsectorperformance,changesintechnologyandoperationalandfinancingcashflow.

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GROUP EXCHANGE 2013 2012 2013 2012 P P P PRevenue Listingandannualsustainingfees 13047961 16777350 1304796116777350Commissionincome 10858799 4290199 6192231 2507320Members’fees 16250 15750 16250 15750Miscellaneousfees 535295 511665 - -

24458305 21594964 1925644219300420

Administrative expenses Auditfees-currentyear 130000 130000 85000 85000-prioryear(over)/underprovision 7004 (16482) 7004 (19389)Employeebenefitexpenses(note3) 12152401 12128200 9328118 9522618Advertisingcosts 1017807 949152 1017807 934850Depreciation(note7) 1036500 718910 456271 547337Operatingleasecosts 930939 552941 797819 470137Reversalofimpairmentprovisionofdebtors - (2598750) -(2598750)Baddebtimpairment 46 - - -Computerexpenses 1601407 1284117 625600 557430Consultingfees 543395 237852 543395 237852Seminarsandconferences 431960 216993 431960 216993Travellingandaccommodationexpenses 562524 572247 562524 572247Members’sittingallowances 142380 147420 86940 95340Otherexpenses 1808049 1650414 12969141147520

20364412 15973014 1523935211769185Employee benefit expenses Salariesandotherterminationbenefits 9905609 9908187 7466742 7611056Pensioncostsandgratuity 1981997 2018419 1596581 1709968Otherbenefits 264795 201594 264795 201594 12152401 12128200 9328118 9522618

Averagenumberofpersons employedduringtheyear 19 22 14 17

Finance income Interestincomeonshortterminvestments 1451980 482158 1338901 452152

Income tax expenseTheBotswanaStockExchangeisexemptfromincometaxinaccordancewiththeIncomeTaxAct.

Investment in subsidiaryCostofshares - - 100 100 The investment in subsidiary comprises of 100% share investment in theCentral SecuritiesDepositoryCompanyof BotswanaLimited,acompanyincorporatedintheRepublicofBotswana.

1.

2.

3.

4.

5.

6.

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Plant and equipment Leasehold Office Furniture Motor Improvements Equipment & Fittings Vehicles Total GROUP P P P P P

Year ended 31 December 2012Openingnetbookamount 167306 425898 372134 572995 1538333Additions 178375 2253537 42940 - 2474852Depreciation(note2) (35124) (416431) (63534) (203821)(718910)

Closingnetbookamount 310557 2263004 351540 369174 3294275

At 31 December 2012Cost 583817 3974333 638861 912955 6109966Accumulateddepreciation (273260) (1711329) (287321) (543781)(2815691)

Netbookamount 310557 2263004 351540 369174 3294275

Year ended 31 December 2013Openingnetbookamount 310557 2263004 351540 369174 3294275Additions 31250 863231 63211 - 957692Depreciation(note2) (47538) (821078) (64413) (103471)(1036500)

Closingnetbookamount 294269 2305157 350338 265703 3215467

At 31 December 2013Cost 615067 4837564 702072 912955 7067658Accumulateddepreciation (320798) (2532407) (351734) (647252) (3852191)

Netbookamount 294269 2305157 350338 2657033215467

EXCHANGE

Year ended 31 December 2012Openingnetbookamount 167306 417350 372134 572995 1529785Additions 178375 263827 28728 - 470930Depreciation(note2) (35124) (246161) (62231) (203821) (547337)Closing net book amount 310 557 435 016 338 631 369 174 1 453 378

At 31 December 2012Cost 583817 1962785 624649 912955 4084206Accumulateddepreciation (273260) (1527769) (286018) (543781)(2630828)Net book amount 310 557 435 016 338 631 369 174 1 453 378Year ended 31 December 2013Openingnetbookamount 310557 435016 338631 369174 1453378Additions 31250 399471 36980 - 467701Depreciation(note2) (47538) (242270) (62992) (103471) (456271)Closing net book amount 294 269 592 217 312 619 265 703 1 464 808

At 31 December 2013Cost 615067 2362256 661629 912955 4551907Accumulateddepreciation (320798) (1770039) (349010) (647252)(3087099)Net book amount 294 269 592 217 312 619 265 703 1 464 808

7.

BOTSWANA STOCK EXCHANGE Annual Report 2013

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2013

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GROUP EXCHANGE 2013 2012 2013 2012 P P P PTradeandotherreceivablesReceivablesfromrelatedparty 2322391 1821943 1583745 5762870Feereceivables 537574 1323610 512810 1249482Prepaymentsanddeposits 261081 202975 201370 184600Otherreceivables 84127 81774 8412781774

3205173 3430302 2382052 7278726

Prepaymentsanddepositsareexcludedfromthetradeandotherreceivablesbalancefor fairvaluepurposes,asthisanalysis isrequiredonlyforfinancialinstruments.

At31December2013,feereceivablesandotherreceivablesofP526799(2012:P1188796)andP512395(2012:P1128767)werefullyperformingforthegroupandexchangerespectively.

At31December2013,feereceivablesofP10775(2012:P134814)andP415(2012:P120715)werepastduebutnotimpairedforthegroupandexchangerespectively.Theserelatetoanumberofindependentcustomersforwhomthereisnohistoryofdefault.

GROUP EXCHANGE 2013 2012 2013 2012 P P P P

Upto3months 10360 42803 - 34509>3to6months 415 92011 41586206

10775 134814 415 120715

8.

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NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2013

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GROUP EXCHANGE 2013 2012 2013 2012 P P P PProprietary rights capitalIssuedproprietaryrightscapital 5200 5200 5200 5200

TheholdersofproprietaryrightsareentitledtoreceiveinterestataratefixedbytheExchangeintheannualgeneralmeeting.Suchinterestmaynotexceedthebalanceavailablefrominterestordividendsoninvestedfunds.

Trade and other payablesTradepayables 285028 1317899 227049 3330747VATpayable 129089 44455 30619 (20520)Otherpayables 2119617 1846383 2119618 1846382

2533734 3208737 2377286 5156609

Amounts due to the Botswana Stock Exchange Security Fund

Balanceat1January 4021776 1762563 4021776 1762563Statutorytransferfortheyear 2693608 4021776 2693608 4021776Settledduringtheyear (4021776) (1762563) (4021776) (1762563)Balanceat31December 2693608 4021776 2693608 4021776 Deferred lease liability Non-current 147838 70529 147838 70529 Current - - - -Balanceat31December 147838 70529 147838 70529

GROUP EXCHANGE 2013 2012 2013 2012 P P P P

Lessthanoneyear 879,629 659191 879,629 659191Betweenoneandfiveyears 2201841 2305282 2201841 2305282

Total 3081470 2964473 3081470 2964473

10.

11.

12.

13.

Thegroupleasesitsofficepremisesunder2operatingleasefacilities.TheleasesrunfromFebruary2013andApril2012respectivelyandbothexpireinMarch2017.Bothleaseshavearenewaloptionuponexpiry.Amountsrecognisedasanexpenseinprofitorlossinrespectofoperatingleasesarediscloseinnote1tothefinancialstatements.Leasepaymentsareescalatedeveryyearbythelowerof7%andtheconsumerpriceindex.

Attheendofthereportingperiod,thefutureminimumleasepaymentsundernon-cancellableoperatingleasesarepayableasfollows:

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NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2013

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GROUP EXCHANGE 2013 2012 2013 2012 P P P PCash and cash equivalentsMoney market investments StanlibInvestmentManagementServices 12125147 17293236 12125147 17293236AfricanAllianceAssetManagement 18652981 - 14997748 - 30778128 17293236 2712289517293236

TheStanlibInvestmentManagementServicesinvestmentisunsecured,earnsinterestof5.61%(2012:5.61%)perannumandhasnofixedmaturitydate.Theinvestmentcanbeliquidatedsubjecttoanoticeperiodof48hourstotheinvesteecompany.

TheAfricanAllianceAssetManagementinvestmentisunsecured,earnsinterestof4.73%(2012:nil%)perannumandhasnofixedmaturitydate.Theinvestmentcanbeliquidatedsubjecttoanoticeperiodof48hourstotheinvesteecompany.

Cash and bank balances

Cashonhandandatbank 784782 2395324 71396 2500Short-termbankdeposits 3465551 4901807 34655514904307

Totalcashonhandandatbank 4250333 7297131 3536947 4904307

Bankoverdraft - (111239) -(111239)

4250333 7185892 3536947 4793068

Forthepurposeofthestatementofcashflows,cashandcashequivalentsattheendoftheyearcomprisethefollowing:

Moneymarketinvestment 30778128 17293236 27122895 17293236Cashandbankbalances 4250333 7185892 3536947 4793068

35028461 24479128 30659842 22086304

9.

BOTSWANA STOCK EXCHANGE Annual Report 2013

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GROUP EXCHANGE 2013 2012 2013 2012 P P P PCash generated from operations

Profitfortheyear 14864866 13452155 10412084 11188521Adjustmentfor:-Depreciation(note7) 1036500 718910 456271 547337-Financeincome(note4) (1451980) (482158) (1338901) (452152)Changesinworkingcapital-Tradeandotherreceivables 225129 (2834200) 4896674 (4547422)-Deferredleaseliability 77309 (84947) 77309 (84947)-Tradeandotherpayables (675003) 1880214 (2779323) 3963649Cashgeneratedfromoperations 14076821 12649974 11724114 10614986

Related party transactions

Thefollowingtransactionswerecarriedoutwithrelatedparties.

a)Membershipfees

-StockbrokersBotswana(Pty)Ltd 3750 3750 3750 3750-ImaraCapitalSecurities(Pty)Ltd 4500 4000 4000 3750-AfricanAllianceSecuritiesBotswanaLimited 4500 4000 4000 3750-MotswediSecurities(Pty)Ltd 4000 4250 4000 4250

16250 15750 16250 15750

14..

15.

Relatedpartiesareentitiesundercommoncontrolorownership.TheExchangewassetupbytheBotswanaStockExchangeAct,1994,andisthereforerelatedtotheGovernmentofBotswana.AllstockbrokerswhoaremembersoftheBotswanaStockExchangearealsorelatedparties.

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GROUP EXCHANGE 2013 2012 2013 2012 P P P PRelated party transactions (continued) Listing and annual sustaining fees on Government bonds (at .125% on nominalvalue of Government bonds 7000000 7000000 70000007000000

c) Government Subvention

GovernmentoftheRepublicofBotswana 9287768 7287770 5024868 3144970

d) Transfer to the Botswana Stock Exchange Security Fund 2693608 4021776 2693608 4021776

e) Sitting allowances by the Committee members 142380 147420 86940 95340

f ) Remuneration for senior managers 6558783 8068894 5192043 6681723

g) Year end balances

Receivables -GovernmentoftheRepublicofBotswana 2322391 1821943 1256666 786243-CentralSecuritiesDepositoryCompany ofBotswanaLimited - - 327079 4976627

2322391 1821943 1583744 5762870

Payables-CentralSecuritiesDepositoryCompany ofBotswanaLimited - - - 2071700-BotswanaStockExchangeSecurityFund 2693608 4021776 2693608 4021776

2693608 4021776 2693608 6093476

15.

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Commitments

Thegrouphadnosignificantcapitalcommitmentsasat31December2013.

Contingent liabilities

Nosignificantcontingentliabilitiesexistedasat31December2013.

Events after the reporting date

Maincommitteemembersconfirmthattherearenoeventsoccurredafterthereportingdatethatrequiresadjustmentstoordisclosuresinthesefinancialstatements.

Fiduciary accounts

Thegroup,throughitssubsidiary,isacustodianofbrokers’liquiditybankaccounts.Brokers’liquiditybankaccountsareusedtotemporarilyholdbuyerdepositsbetweentransactiontradeandsettlementdatespendingclearanceoftransactionscarriedoutontheBotswanaStockExchange.Thecompany,throughitsauthorisedsignatories,instructsthebanktoreleasethecashinthebroker’sliquidityaccountforsettlementofrelevantExchangetransactionengagedwiththeseller.Thefollowingwerethebrokers’liquiditybankbalancesasattheendoftheyear:

2013 2012 P P

Favourablebankbalances 1999480 1325340Bankoverdrafts - (1541637)

1999480 (216 297)

16.

17.

18.

19.

BOTSWANA STOCK EXCHANGE Annual Report 2013

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2013 2012 P P RevenueCommissionincome 6192231 2507320Listingandannualsustainingfees 13047961 16777350Members’fees 16250 15750Governmentsubvention 5024868 3144970Otherincome 31225 60164Total income 24312535 22505554

Administrative expensesAdvertising 1017807 934850Auditfees 92004 65611Reversalofimpairmentprovisionofdebtors - (2598750)Bankcharges 29330 30925Cleaning 65420 49698Communicationexpenses 304455 371140Computerexpenses 625600 557430Consultingfees 543395 237852Recruitmentexpenses 88088 42885Donations - 1500Depreciation 456271 547337Electricity 80994 92831Entertainment 42489 74290Insurance 125105 107144Internshipallowances 87364 20000Legalfees 31206 -Libraryexpenses 15221 14084Members’sittingallowances 86940 95340Motorvehicleexpenses 58817 54216Officeexpenses 47773 38601Printingandstationery 44576 30848Rent 797819 470137Repairsandmaintenance 76738 31975Salariesandwages 9063323 9321024Securitycosts 42521 32168TrainingLevy 24130 24009Seminarsandconferences 431960 216993Staffwelfare 264795 201594Subscriptions 122754 120896Travellingandaccommodationexpenses 562524 572247Water 9933 10310 15239352 11769185

Operatingprofit 9073183 10736369Finance incomeInterestincome 1338901 452152

Profit for the year 10412084 11188521

Thedetailedstatementofprofitorlossandothercomprehensiveincomedoesnotformpartofthefinancialstatementscoveredbytheauditopiniononpage5.

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DETAILED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2013

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Principal activities

RegulatingandpromotingthelistinganddealinginsharesandothersecuritieslistedontheBotswanaStockExchange(BSE).

Committees of the Botswana Stock Exchange

MainCommittee

Ministerial appointees:

ElainaGonsalvesIponengSennanyanaProfessorJohnKiggundu(appointedJune2013)

Elected Members:

PatrickO’Flaherty(Chairperson)MartinMakgatlhe(resignedJune2013)GregoryMatsakeSelekaMokama(resignedJune2013)GoitseoneKgaodiKabeloMohohloReginaVaka(appointedJune2013)

MembershipofSubCommittees:

(1) Listings and trading

PatrickO’Flaherty(Chairperson)MartinMakgatlhe(resignedJune2013)KabeloMohohloSelekaMokama(resignedJune2013)GregoryMatsake(appointedJune2013)ReginaVaka(appointedJune2013)

(2) Audit

IponengSennanyana(Chairperson)ElainaGonsalvesSelekaMokama(resignedJune2013)GregoryMatsakeGoitseoneKgaodi(appointedJune2013)

(3) Investigations and disciplinary

ElainaGonsalvesIponengSennanyanaProfessorJohnKiggundu(appointedJune2013)

(4) Governance & Remuneration

ElainaGonsalves(Chairperson)IponengSennanyanaProfessorJohnKiggundu(appointedJune2013)

GENERAL INFORMATION

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Chief Executive Officer

HiranMendis

Secretary to the Board of Directors

LatelangChakalisa

Regulator

Non-BankFinancialInstitutionRegulatoryAuthority(NBFIRA)FirstFloorMVAHousePlot50367ShowgroundPrivateBag00314Gaborone

Postal address

PrivateBag00417Gaborone

Independent auditors

KPMG

Bankers

StandardCharteredBankofBotswanaLimitedBarclaysBankofBotswanaLimited

(ThefinancialstatementsareexpressedinPula,thecurrencyofBotswana)

Compiled and edited by

ThapeloTsheoleandKopanoBolokwe

Design and Layout by

RedPepperPRC

Printed by

ImpressionHouse

BOTSWANA STOCK EXCHANGE REACHING NEW HEIGHTS

GENERAL INFORMATION

BOTSWANA STOCK EXCHANGE AND ITS SUBSIDIARY COMPANY

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NOTES

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Annual Report2013

Plot 64511 Fairgrounds GaboronePrivate Bag 00417, Gaborone, BotswanaTel: +267 318 0201, Fax: +267 318 0175

www.bse.co.bw