Trading at BSE gets automated

COMPUTING

By John Churu, Gaborone, Botswana

The Botswana Stock Exchange recently joined other exchanges in the continent when it shifted from the manual trading system to a modern platform that will improve efficiency in buying and selling securities. The move will also see the BSE moving in the same wavelength as other modernised exchanges elsewhere in the world.  

The new electronic trading system, or the Automated Trading System, replaces the floor system method and it is expected to make the BSE more visible and will create efficiencies in the methods of trading.

The stock exchange earlier reported in its annual report for 2011 that “the ATS is a major development for the local bourse and compliments the already established CSD, which will propel the BSE into the future.”

Accordingly, the Central Securities Depository was implemented in 2008 and since its introduction the systematic risk of investing in share market decreased. “The ATS will make us more visible and help create efficiencies in the trading methodology, which we expect will enhance liquidity.”

A letter to market participants, explained that the new trading platform will offer the market an up-to-date and more efficient trading platform. The Bourse has also upgraded the Central Securities Depository System ICSDJ to enable the two systems, ATS and CSD, to be integrated.

During this period of transition from manual trading system to the ATS, the BSE had declared last Thursday a trading holiday and Friday a settlement holiday, respectively. “The holidays were declared to allow for all the necessary systems to be put in place for 'go live'”

As a result of this transition, trades that should have settled on the 24 August 2012 will now settle on the 27 August 2072. After which, settlement of trades will continue as normal.

However, the exchange observed that in order for the CSD to reach its potential, there is a need to engage investors and motivate them to dematerialise their shares. “A central depository system can only reach its full potential in a 100 percent dematerialised environment.”