BOTSWANA TOUTS STOCK MARKET AS REAL GEM.

Byline: Suzanne Daley The New York Times

Officially, the opening bell had rung and Botswana's year-old stock exchange was open for business. But in reality, no one here bothers with a bell and the country's only official trader, Martin Makgatlhe, was out.

On this stock exchange, the sweat does not exactly pour. No frantic shouting, rolled up sleeves or floors littered with sell slips at the end of the day. On a recent morning, two hours went by without a single phone ringing. There are only 12 companies listed on the Botswana exchange. The ticker tape is a white board. It gets updated on Fridays.

The exchange is open from 9 a.m. to noon. But the truth is, things are a little more flexible than that. If you are interested, you really could call in the afternoon.

So, why have a stock exchange? Last year, the government decided that creating one would bring in foreign investors.

There aren't many local investors, says Andrew Ashton, the analyst for the country's only brokerage firm, Stockbrokers Botswana Ltd., which runs the exchange. ``Cattle,'' he explained, looking a bit pained. ``Cattle is a big part of the Botswana heritage - it's hard to say to a lot of these people `Here is a piece of paper that is worth 10,000 pula.' They like to invest in cattle.''

Botswana, about the size of Texas with the population of Rhode Island, has, by African standards, a booming economy. Thanks to diamonds and cattle, its economy grew more than 10 percent a year during the 1980s. This city, the capital, is dotted with shimmering new glass office buildings. The parking lots are filled with four-wheel-drive vehicles. The average yearly household income is estimated at $2,800, one of the highest in Africa. But that doesn't make selling Botswana stocks all that easy.

``Most people,'' Ashton said, ``think Rwanda is just down the road - or Liberia'' - two war-torn countries that actually are, as he put it, ``miles away.''

Indeed, Botswana, a landlocked country surrounded by South Africa, Namibia, Zambia and Zimbabwe, has not had the bumpy road of many of its neighbors. It has been a stable democracy ever since it won its independence from England in 1966. Soon after that, diamonds were discovered here. Botswana is now the world's largest gem-quality diamond producer.

At independence, Botswana - which includes vast stretches of virtually uninhabited desert - had less than five miles of tarred road. Now it has more than 1,800. In 1966, there were 20 university graduates. Now there are 20,000.

The country has no debt and its per capita reserves are among the highest in the world. Some people here say the place is positively boring. But there is still plenty of poverty, and with economic growth slowing in recent years and the population increasing rapidly, the government is trying to diversify and create jobs.

Enter the stock exchange.

The problem is, there just isn't that much for sale. The exchange isn't attracting the kind of investment that would encourage companies to list their shares - they might not even get the full value of their assets, Ashton said. Right now, most of the stocks are selling at low prices relative to their earnings.

``Real low PE's,'' says Ashton. ``That's why the stocks are such great buys.'' (There is clearly a lot of pent-up salesmanship in this office.)

So, just how small is the exchange? Well, it's bigger than Malta's or Lithuania's. All the companies together are worth about $395 million. By comparison, the New York Stock Exchange is valued at more than $5 trillion. The exchange is expected to grow: The Botswana government says it will privatize more state-owned companies, such as Air Botswana. But that could take a year or two.

No one seems to care much that to buy or to sell you have to go through Stockbrokers Botswana Ltd. The basic philosophy at the company is to try to split the difference between what the seller wants and the buyer wants to pay. Makgatlhe says he tries to avoid giving advice. ``If we really feel it's right,'' he said, ``we can recommend. But we tread a careful line. It hasn't been a problem.

``If you think about it, we have a lot to gain by acting right. A stock exchange is all about confidence.''

Morgan Stanley's Africa Fund recently bought about $3 million in stocks listed on the exchange.

``The numbers were just so attractive,'' said Jaideep Khanna, the fund's portfolio manager. ``And it's a very stable country. It's up 20 percent in local currency already.'' Of course, the local currency, which tends to rise and fall with the South African rand, just got ``hammered'' when the rand declined 20 percent.

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Photo

Photo: Martin Makgatlhe is the lone trader in the Botswanastock exchange, which so far lists 12 companies.

Associated Press