The Sunday Mail
Enacy Mapakame
THE Zimbabwe Stock Exchange (ZSE) has managed only one listing in the past two years while 13 counters exited the market as authorities tried to rationalise the bourse, The Sunday Mail Business has learnt.While market rumours suggest that the listings drought and the high de-listings were driven by an illiquid market, ZSE chief executive Mr Alban Chirume notes that they were, however, ridding the market of rogue companies for the benefit of the public.
“Whilst much has been written about the de-listing trend being indicative of the economy, it is important for the ZSE to point out that the de-listing trend was also ZSE’s strategy to rationalise the board for the benefit of the investing public,” he said.
Of the 13 de-listed companies since 2012, two were under judicial management while five were struck off the local bourse due to their failure to meet the basic listing requirements such as timely provision of financial statements to shareholders.
Three of the companies were de-listed following the completion of various schemes of arrangements which are done pursuant to the Companies Act Chapter 24:03 through the High Court of Zimbabwe. The other companies’ de-listings were on a voluntary basis as a result of mergers with other listed entities.
Among the de-listed companies are Interfresh, Gulliver, Barbican, Steelnet, Apex, Trust, Cairns, Celsys and Chemco which was bought out by agro-concern TSL. Mr Chirume said the ZSE has started rolling out an aggressive strategy to engage companies not listed to consider listing on the local bourse.
“Starting 2014, the ZSE has structured a full-fledged department solely dedicated to product development and issuers’ services.
“The concept is focused on attracting quality issuers which also helps the issuer regulation arm of our business to reduce de-listings and ultimately protect investors. There is thus an underlying concept of enabling unlisted companies with potential to raise capital through the ZSE,” said Mr Chirume.
The department’s mandate is premised on stakeholder engagement including actively scouting for new issuers as well as the retention of the current listed companies.
Although the number of companies intending to list this year could not be ascertained, Mr Chirume explained that there were still issuers interested in becoming public.
Companies have to meet the basic listing requirements first.
Plans are, however, underway for a secondary bourse to enable companies that do not qualify for the ZSE to list on a smaller stock exchange with manageable requirements.
Mr Chirume added: “This project, which has been referred to as the SME Bourse, is currently underway and we are working with a few potential issuers to prepare them to be listed once the platform and the requisite listings requirements have been approved by our regulator.
“It should be noted that the products to be launched by the ZSE will result in affording issuers a chance to raise capital through a regulated platform of the Zimbabwe Stock Exchange thus new listings are anticipated provided the prospective applicants meet the requirements.”
The establishment of an alternative stock exchange will enable emerging companies to raise capital through a regulated platform.
Listing on a stock exchange allows companies to unlock shareholder value, minimise risk and attract investors.
The country’s first stock exchange was established in 1896 in Bulawayo and was open for six years.
Other exchanges were also in Mutare and Gweru.
The exchanges thrived on mining activities, but closed in 1926. In 1946, a new exchange was established in Bulawayo.
A second floor opened in Harare (then Salisbury) in December 1951 with trading between the two exchanges done by telephone.
