daniel chigunwe
Business Reporter
The Securities and Exchange Commission of Zimbabwe (SecZim) says the country’s capital market has witnessed steady growth in collective investment schemes (CIS), which now stand at 81 with funds under management of $338 billion (Zimbabwe dollars) plus US$21,5 million as of September 30, 2023.
A collective investment scheme is an investment fund used for collective investment by investors, and their money is invested on a pooled basis by an investment manager (asset manager) for a fee.
Section 3 of the Collective Investment Schemes Act (Chapter 24:19) defines a CIS as an arrangement concerning the property of any description, the purpose or effect of which is to enable participants to participate in or receive profits or income arising from the acquisition, holding management, or disposal of the property.
Each collective investment scheme (internal scheme) must be registered by the Securities and Exchange Commission of Zimbabwe, and their operation is governed by the Collective Investment Schemes Act (Chapter 24:19).
SecZim has been working on the development of a wide range of investment products on the market as part of efforts to widen market activity while at the same time improving financial inclusion.
“We have witnessed a steady growth in collective investment schemes over the past couple of years, with 20 schemes having been registered between Q1 2022 and Q3 2023.
“The total number of collective investment schemes now stands at 81, with funds under management of $338 billion-plus US$21,5 million as of September 30, 2023,” said Mr Anymore Taruvinga, the SecZim chief executive, at a recent listing event.
One of the key functions of the commission is to encourage the development of free, fair, and orderly capital and securities markets in Zimbabwe.
Mr Taruvinga said this year, the commission was a bit concerned about the loss of listings on the Zimbabwe Stock Exchange (ZSE) but is glad that Real Estate Investment Trusts (REITs) are finding a home on the local currency platform.
“As we celebrate the listing of REITs, we are aware of the challenges facing the capital markets and will continue to engage our principals for supportive policies,” he said.
He noted that the capital market has a role to play in mobilising resources that are required for deployment in productive sectors as the country gears towards the attainment of Vision 2030.
“This is more so under the current global conditions where liquidity is tight and funds are retreating from emerging and developing markets.
“We will need to rely more on domestic resource mobilisation, and collective investment schemes such as REITs enable resource mobilisation from both institutional and retail investors,” said Mr Taruvinga.
He said capital markets have a long way to go in ensuring financial inclusion, but we cannot have sustainable capital markets if participation is limited to the well-to-do and institutional investors only.
Mr Taruvinga said there is a need for more products that are inclusive and appeal to the general citizenry.
“I urge our market participants to look beyond equity and start thinking about cows, goats, gold coins, virtual assets, and other commodities that can appeal to our citizens.
“At the moment, we are the only sector without some form of low-cost financial inclusion product,” he said.
He added that the country’s capital markets have a solid foundation, and such activities provide a firm basis to claim that we are contributing towards nation-building.
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