The Sunday News
Nkosilathi Sibanda, Business Correspondent
BUSINESS investment experts have implored Small to Medium Enterprises (SMEs) to consider exploring the Exchange Traded Fund (ETFs) portfolio in order to find would-be investors to grow their businesses.
This comes in the wake of renewed interest by the Securities Exchange Commission of Zimbabwe (SECZ) to reach out to businesses in the country to take advantage of the ETFs regime that has the potential to magnify and diversify investments across the board.
Old Mutual was the first to introduce ETFs at the start of the year, making the country the fifth in Africa to list on the trading instrument. Other countries are South Africa, Nigeria, Kenya, and Egypt.
It is barely three months since ETFs were introduced in the country and SECZ in conjunction with Old Mutual Zimbabwe, last Friday held a webinar to deliberate on the success rate and performance of ETFs on the Zimbabwean capital market. In order to bring in educational awareness to the broader business trading system in the economy, the online seminar also unpacked the benefits of engaging in the ETFs for both individuals and businesses who want to trade in the stock market.
The need to reach out to SMEs and the informal sector about ETFs was highlighted by the general manager of Southern Trust Securities Mrs Thandiwe Shonhiwa who said trading in blue chip companies was highly advisable.
“While it is only three months since the introduction of ETFs, there has been some activity. SMEs and in particular have been targeted to also get involved and get the benefits of investing in diversified portfolios using less capital,” she said.
Old Mutual Zimbabwe has held a number of road shows countrywide in a bid to make it known how the ETFs work.
According to Old Mutual Investment Group managing director Ms Marjorie Madiya, a lot still has to be done to rope in the SMEs.
“We are not there yet. We had a lot of road shows but we feel the need to do more for SMEs as they are also key. Small businesses should come forward and be assisted,” she said.
Head of Investor Education at the SECZ Mr Farai Mpofu who co-hosted the seminar concurred with the idea of engaging startups, women investment clubs and the wider corporate market to go for the ETF trading regime.
In an interview with Sunday News, a Harare based stock market analyst made particular emphasis on businesses run by women that they have to be knowledgeable of ETFs.
“People have to know about it. Interest on ETFs has to cascade to women investment clubs. While it is worthy to have joint clubs, it is advisable that people invest in blue chip companies as explained by the ETFs strategy. Investing in the stock market is worthy for the informal sector,” said the analyst.
The ETF instrument tracks the Zimbabwe Stock Exchange (ZSE) top 10 counters that have solid and investable capital. Stock market watchers say the introduction of the ETF will help lure in investors and give them the benefits related to trade, portfolio diversification, liquidity and business transparency.
The online seminar showed renewed interest from the small and emerging business community, in what could give way to an intensified education awareness from SECZ.