Since the emergence and spread of Covid-19 globally, stock markets around the world have seen numerous crashes and recoveries in recent months and the Botswana Stock Market is no exception to this.
Since the beginning of 2020, the Botswana Gaborone Index, a major stock market index tracking performances of the largest companies which are traded in the Botswana Stock Exchange, has shown a decrease of 451 points, or 6.02% due to the impact of Covid-19.
This may cause some hesitation in a lot of investors but should not deter them completely as there are various compelling reasons to invest in Botswana, especially with the reopening of economies around the globe says analyst Louis Schoeman from Forexsuggest.com
Botswana has a stable economy, Covid-19 factors put aside, and there are no foreign exchange controls. There is also access to a substantial SADC, or South African Development Community, market which consists of 200 million people along with Europe and Asia.
Botswana features an exceptionally low tax regime and there is zero tolerance to corruption with fair industrial relations and trade unions which are not militant. In addition, Botswana features protection of foreign investment.
Despite the impact of Covid-19 on global economies, Botswana is still one of the best performing economies in Africa which welcomes both foreigners and foreign investment.
The Botswana Innovation Hub focuses on four sectors namely:
• Energy and Environment
• Information and Communication Technology, and
• Mining Technologies.
When considering the various impacts that Covid-19 has had on economies and on the stock markets of various countries, there are numerous reasons why investing in stocks may be a saving grace not only for investors, but for the markets and economies of various countries.
To make up for losses during market crashes
Markets around the world were substantially volatile following closures due to Covid-19 with crashes, rallying, and then falling markets yet again. Investors who have seen falling accounts still have a chance at recovering from such losses in the long-term.
This can be done by investing wisely in companies that have either shown stability during the pandemic, or those who have risen to the top and are showing strength now more than ever.
Advantageous buying opportunities
Covid-19 has caused a recession in various countries and there is always a chance that the markets around the world may fall further. It is still unclear whether the great Covid-19 storm has passed for the greater part and the world can move into recovery.
There may be great discounts on shares of strong companies which are still poised to survive these difficult times and who will come out of the pandemic stronger than ever.
Despite the impact of Covid-19 on the Botswana Stock Market, investing in stocks post-Covid still holds a lot of opportunity for recovery and even great gains when it is done right.
By investing in companies that have remained strong, or those who have emerged stronger during the pandemic, investors have a chance at making great profits, given that they have the necessary risk management protocols in place against substantial losses.