Online Reporter
Nelson Gahadza
Senior Business Reporter
THE Government will review Zimbabwe Stock Exchange listing rules and regulations to reduce the cost of doing business and make the domestic currency-based securities exchange more competitive in attracting new listings and facilitating capital raising.
Finance, Economic Development and Investment Promotion Minister Mthuli Ncube said the Government wanted the ZSE to come up with proposals to lower the costs associated with listing and operating on the bourse, amid growing competition among Zimbabwe’s capital markets platforms.
Prof Ncube said this was necessary to ensure the ZSE remained an effective vehicle for mobilising capital and attracting investment, while allowing it to complement rather than compete with the Victoria Falls Stock Exchange (VFEX) and other specialised exchanges.
“An issue that we need to deal with on the ZSE is just the cost of doing business within the ZSE. I have asked management to come back to me with proposals so that those costs can be lower, so it becomes a competitive exchange,” Prof Ncube said.
The treasury chief was speaking at a media engagement in Victoria Falls following the listing of Old Mutual Limited on the VFEX on August 7.
The comments come against the backdrop of increasing interest by companies in the VFEX, which was established in 2020 as a United States dollar-denominated securities market based in the Victoria Falls Financial Centre.
Some companies that migrated from ZSE to VFEX cited issues such as currency considerations, transaction costs and the need for a market platform that better aligns with their capital-raising and investment requirements.
The shift has raised questions over the competitiveness of the ZSE and whether the migration of established counters could gradually weaken its role as Zimbabwe’s primary equities market.
However, Prof Ncube said the Government did not view the development of the VFEX as a replacement for the ZSE, arguing that the two exchanges had different but complementary roles within the broader financial market architecture.
“VFEX’s primary job is to attract foreign direct investment, making use of the VFEX financial services centre, especially economic zone status, to attract foreign direct investment. That’s not immediately available on the ZSE platform.
“It’s quite clear that there’s some differentiation in terms of their roles and we believe as a Government, both can grow together successfully,” he said.
The minister said the Government was therefore looking at incentives and policy measures that would allow each exchange to serve its intended market more effectively.
Zimbabwe has several capital markets platforms, including the ZSE, VFEX, Financial Securities Exchange (FINSEC), the Zimbabwe Mercantile Exchange and the Zimbabwe Emerging Enterprise Exchange (ZEEX), each targeting different categories of issuers and investors.
Prof Ncube said the Government was prepared to consider incentives that could strengthen the various platforms, particularly those aimed at supporting smaller businesses to access long-term funding.
“For instance, if you look at ZEEX, we want it to be a platform for supporting SMEs, discounting public listings and raising capital.
“So whatever incentives you propose, we will throw them at the platform so that the platform can do its job,” he said.
The ZSE has also been seeking to diversify its product offering beyond traditional equity listings.
ZSE chief executive Mr Justin Bgoni said the bourse was focusing on introducing more products and attracting listings from different asset classes.
“Our focus is on product diversification and ensuring that we get more listings not just from equities, but also from real estate investment trusts and exchange-traded funds. This year we managed to witness the second REIT listing and the first ETF,” he said.
