While Botswana has a large spread of foreign investors and intermediaries that operate accounts in the market, the size of investments and the level of activity that these foreign investors account for is relatively small in nominal terms.

“The sub-custody market is dominated by two regional providers. Most global intermediaries have had the Botswana market open for a while. Assets and activity have grown marginally over the years and that is more due to the appreciation of the local market than further inflows,” says Rajesh Ramsundhar, head of investor services, Africa, Standard Bank.

The lack of activity from foreign investors and therefore the small size of the sub-custody business reflects a lack of securities and low liquidity in the market. Most of the recent developments in the capital market have therefore been focused on stimulating liquidity, including the launch of the CSD and ETFs, the introduction of an automated trading system as well as discussions about launching global depository receipts (GDRs). Liquidity in the market has materially improved since the introduction of these changes, says Ramsundhar.