By Phiwa Sikhondze
The Eswatini Stock Exchange (ESE) has revealed that Nkonyeni Pre-Cast Limited (NPC) closed the financial year strongly, recording the highest price change at 20%. This is contained in the ESE Annual Report ending March 2024.
“There was no price fluctuation for Royal Eswatini Sugar Corporation (RES), SBC, and FNB Eswatini during the period under review. The lack of activity in these counters is partially due to their holdings being dominated by institutional investors. Swaprop share price dropped from E7.90 in March 2023 to E7.50 in March 2024 due to market forces. NPC Limited’s initial public offering was E1.00 in November 2023 but it closed the financial year strongly at E1.40 per share, which was the highest price change for the year at 20%,” notes the Annual Report.
The ESE reported a market capitalization of $0.35 billion for the financial year under review, positioning it as one of the smaller exchanges in the Southern African Development Community (SADC).
Ncamiso Ntshalintshali, the ESE Chief Executive Officer notes that despite a series of developments aimed at boosting growth, the exchange continues to face significant liquidity challenges, limiting trading activity.
The CEO states that the lack of liquidity has been exacerbated by limited public participation and the dominance of institutional investors holding the majority of shares.
“Only seven of the nine listed companies saw any trading activity during the financial year, with companies such as FNB Eswatini and the Royal Eswatini Sugar Corporation remaining dormant in terms of trading.”
In contrast, the Johannesburg Stock Exchange (JSE) remains the region’s most dominant market with a capitalization exceeding $1 trillion, highlighting the disparities within SADC stock markets. Eswatini’s exchange ranks towards the bottom, just above Lesotho and Mozambique, both of which have similarly small and illiquid markets.
The ESE attributed the low liquidity to several factors, including the traditional reliance on manual trading methods, which were only recently replaced by the Automated Trading System (ATS). While the ATS is expected to improve efficiency and transparency in the long run, it has not yet yielded the anticipated boost in trading volumes.
In response to these ongoing challenges, the ESE is intensifying efforts to attract new listings, particularly from the local business sector and Small and Medium Enterprises (SMEs).
Additionally, the exchange is engaging with foreign companies and regional exchanges in a bid to encourage cross-border listings, which could help increase liquidity and market participation.
The ESE also announced plans to introduce more diverse products, including government bonds, derivatives, and exchange-traded funds (ETFs), to make the exchange more attractive to both local and international investors. These efforts are part of the ESE’s broader strategy to align with international standards and increase its competitiveness within the SADC region.
The exchange’s leadership remains optimistic about the future. Ntshalintshali, noted that while liquidity remains a challenge, the recent technological upgrades and efforts to broaden product offerings are expected to gradually improve market activity.