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THE Zimbabwe Stock Exchange wants to shrug off its “elitist” tag by courting indigenous investors and informal businesses to participate on the local bourse.
The market is dominated by foreign investors due to low currency risks presented by the multi-currency system. Most trades are conducted in the US dollar.
The ZSE also has a diversified portfolio of stocks on offer compared to other African markets.
ZSE business development executive Ms Linah Mushangari said they intended to improve financial literacy in the informal sector as part of a deliberate effort to make investing attractive.
It is envisaged that the move will help demystify the bourse as a preserve of the elite.
“According to the budget pronouncements in the last two years, the informal sector is now the new economy and there is also talk that this sector is unbanked.
“The ZSE will increase its outreach programmes to this sector with the aim of increasing participation, encouraging formalisation of some companies on the sector and ultimately encourage them to list on the Zimbabwe Emerging Enterprise Market (ZEEM) and the Main Board,” said Ms Mushangari.
The ZSE is considering establishment of a second tier board for small businesses that do not qualify to list on the primary bourse.
ZEEM is an initiative designed to promote emerging businesses, especially those owned by indigenous Zimbabweans.
The informal sector is Zimbabwe’s biggest employer and the World Bank estimates that as much as US$7 billion circulates in it.
According to the 2014 Labour Survey report, of the 6,3 million people that are employed, 5,9 million – representing 94,5 percent – are in the informal sector, while 347 000, or 5,5 percent, are in formal employment.
Mrs Mushangari went on: “With current initiatives by Government to spur productivity, opportunities for black people with regard to wealth creation are limitless.
“In recognition of this, the ZSE is currently working on development of a second tier board.”
Financial literacy among indigenous Zimbabweans has markedly improved since Independence, but local savings remain depressed.
The local stock broking business is now dominated by indigenous companies.
“With the advancement of financial knowledge amongst the black populace and eradication of inequalities in income levels and employment opportunities, a shift has been witnessed with regard to stock market activities,” said Ms Mushangari, adding: “Today the stock broking fraternity is predominantly black, a better reflection of the country’s population.”
ZSE authorities are also targeting to lure investments from Zimbabweans in the Diaspora through holding road shows and workshops.
Online Reporter