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Business Reporters
Relocating the Zimbabwe Stock Exchange from the central business district is not logistically correct as it stifles the small investor’s efforts to access capital markets. Chairman of the Parliamentary Portfolio on Budget and Finance Mr David Chapfika told The Herald Business yesterday that while big stock exchange players will always find their way out, relocating the exchange to Ballantyne Park will mean that small players will be excluded.
His comments came in the wake of news reports that ZSE will move this half of the year to a predominantly residential area in Ballantyne Park along Ridgeway North. A member of the parliamentary committee, Mr Eddie Cross, said it was important for ZSE to remain in the CBD considering its importance in the economy’s matrix.
“The movement of ZSE to residential areas will make it exclusive and less accessible especially to small investors. It is not the right decision at the moment.”
The same views have been echoed by most analysts and observers who say that ease of accessibility is one of the main functions of the stock exchange. “Remember there are those ordinary people in the street who want to know and learn about investment. It will become increasingly difficult for them to commute to Ballantyne Park — bearing in mind that the area does not even have commuter omnibuses,” said market analyst Fiona Chigwida.
“In fact, it goes against the spirit of indigenisation and empowerment, which Government is always preaching about. How do you include the small investors of the economy when you take a stock exchange to Ballantyne Park?” she added.
Economist Mr Joseph Sagwati questioned the board for making such a recommendation.
“Whose recommendation was it anyway? A nation’s stock exchange is centred at the hub of activity. Why would anyone make a unilateral decision to move the exchange from within the operational environment wholly accessible by both the public and traders alike?
“Maybe there was some financial gain of some sort on the part of the chief executive,” said Mr Sagwati. However, ZSE board chairperson said the decision to purchase the property had been done with full support of the board.
“We really interrogated the issue as a board and approvals were done after realising the merits. When the matter was tabled, there was no opposition from other board members.”
She said the decision to move the exchange from the CBD was necessitated by high rentals.
Mrs Gadzikwa said concerns over the decision to acquire the property from the shareholders or stakeholders should have been brought before the board through representatives.
Stockbrokers who spoke to this paper on condition of anonymity, however, said the board is there to represent the interests of the shareholders not vice versa.
“The issue should have been debated at shareholder level since it is their capital that was used to purchase the building.
“Our representative is not the spokesperson of the board and therefore the chair and her board should have approached shareholders through an extraordinary general meeting and input from all would have been sought.”
Well placed sources say that the minutes of the last annual general meeting show that CEO Mr Alban Chirume denied the existence of the building.
“In fact, most stockbrokers knew of the building and its location last week, when it appeared in the papers.”
Online Reporter