Chronicle Editor
Oliver Kazunga, Senior Business Reporter
THE Securities and Exchange Commission of Zimbabwe (SecZim) is set to embark on a drive aimed at encouraging more companies to list on the local capital markets to promote economic growth.
Under Vision 2030, Zimbabwe hopes to attain an upper middle-income economy with a Gross Domestic Product per capita of US$3 500.
It is in this context that SecZim believes having more listings on capital markets would foster capital investments, partnerships and loans for various projects that are invaluable in driving Zimbabwe towards the envisaged economic growth and development.
In an interview at the end of a three-day capital markets media workshop that ended in Harare on Sunday, SecZim acting chief executive officer Mr Gerald Dzangare said the number of listings in the country’s capital markets was low due to lack of awareness.
“The ratio of listed companies to unlisted companies is quite low at the moment, it is our desire that more companies actually list so that we have more companies that are publicly traded.
“The listings are low mainly because of lack of awareness, lack of awareness to the companies themselves that are not listed.
“I think we need to have a situation where we actually get to educate them more on the advantages of getting listed and also on the fact that it’s not as complicated as it looks,” he said.
“What we are doing at the moment and planning to work on, is to actually have like a sandbox-set up, where companies can learn what it means to list and they can actually not formally list but be able to start preparing and practising for listing so that awareness is among the companies as well.”
Zimbabwe’s capital markets comprise three players, the Zimbabwe Stock Exchange (ZSE), Financial Securities Exchange (Private) Limited (Finsec) and the Victoria Falls Stock Exchange (VFEX), which trades in hard currency and was operationalised towards the end of last year.
The ZSE has a total of 55 listings while Finsec and VFEX have one and four respectively.
Mr Dzangare said there were a number of advantages that companies derive from listing on the capital markets.
“The company performs better because the listing requirements have got conditions whereby the company is supposed to publish their financial statementements, their financial performance every six months and every 12 months.
“If listed, a company tends to be monitored by the public because it will be accountable to the public, as a result such a company tends to perform better,” he said.
“The other advantage that also comes from listing is that the more companies that list, the more shares that we have that are traded. So, the Zimbabwe population will have more shares to buy and the general public will be able to participate more on the ownership of companies.
“This is because you do not have to 100 percent ownership as you can just own even one percent of a company that is listed. So, it empowers our population.”
Mr Dzangare highlighted that another contributory factor to low listings was lack of marketing effort by the bourses themselves to attract more companies’ participation on the capital markets.
“The other reason why it’s also low is because the actual exchanges need to market more to get more companies to list,” he said.
The workshop, which was hosted by SecZim in partnership with the Investor Protection Fund targeted business and financial journalists and editors.
The objective of the workshop was to share SecZim activities and investor education campaigns the two organisations are embarking on as a vehicle to accelerate the country’s economic growth through capital markets.
“The media also plays a critical role in promoting listings, first of all the media can actually bring awareness to the individual companies that they need to list.
“A person who is operating a small business can actually learn from the media how they can list and the media can help the population to be aware of the fact that there are companies that are publicly traded where the population can participate.”
“So we feel that the media is a key partner for us in terms of getting listings, media coverage of the current companies that are listed will also help other companies to see that listing is not as complicated as most people think,” he said. — @KazungaOliver
Online Reporter