The Sunday News
Judith Phiri, Business Reporter
THE Securities and Exchange Commission of Zimbabwe (SecZim) expects more Exchange Traded Funds (ETFs) listings this year as the capital markets continue to grow.
ETFs are baskets of different types of investments such as stocks, commodities and bonds that are pooled into a single entity, which then offers shares to investors that are subsequently traded on major stock exchanges.
In Zimbabwe, Old Mutual pioneered the ETF listings when it listed the Old Mutual Zimbabwe Stock Exchange Top Ten Index Exchange Traded Fund (ETF) in January 2021.
Another securities firm, Morgan and Co in January this year launched its exchange traded fund with the listing of the multi-sector exchange traded fund (ETF) on the Zimbabwe Stock Exchange (ZSE). Recently, in March CBZ Holdings’ Datvest Modified Consumer Staples Exchange Traded Fund (ETF) listed on the ZSE, becoming the country’s third ETF. SecZim acting chief executive officer Mr Gerald Dzangare told Sunday News Business that more ETFs listings were expected this year.
“Yes, there are more that are coming and the year end is far let’s say by the third quarter you should be able to see some. I cannot say much about them as yet because of confidentiality reasons but definitely there are some that are coming,” he said in an interview on the sidelines of the recently ended Zimbabwe International Trade Fair (ZITF) 2022.
Mr Dzangare said there were a number of capital markets players that were participating in ETFs space and they were coming up with some very exciting and innovative ones. He said capital markets play an important role in economic development as they boost investor confidence, bringing in new capital.
“More ETFs will bring economic growth as this will allow more people to participate on the capital markets. It will result in better performance from the listed companies because they are now under more scrutiny. A lot of people are now studying their performance and as we get more listings you would find that the capital market players will have more options in terms of bringing ETFs to the exchanges,” he added.
Mr Dzangare said several products have been launched within the capital markets in the last five years which has resulted in improved market activity. He said they have also embarked on a drive aimed at encouraging more companies to list on the local capital markets.
“We have a two-pronged approach to increasing listings on the capital markets in line with the country’s vision to be an upper middle-income economy by 2030. To be an upper middle-income economy you need a population that is investing in capital markets and so one of the initiatives that we are taking is that we are introducing more stock exchanges,” he said.
“You will notice that before we only had the ZSE, now we have the Victoria Falls Stock Exchange (VFEX), a subsidiary of ZSE and we also have the Financial Securities Exchange (FINSEC). So, we anticipate that there will be one or two more coming so that the investing public gets more options of where to invest.”
Mr Dzangare said for their second initiative they had tasked the exchanges to come up with incubators by taking companies and putting them on their sandbox platform. He said this was on a test basis so that the companies get to know what is required in order to list and what investors expect from companies.
“So, for this incubator period we expect that the exchanges will come up with the timeframe a company will need and then there are steps that the company is supposed to take within that period so that when it ends the company is then listed.”
Mr Dzangare said they were working on empowering the informal sector with the knowledge and capabilities to list and get them to the point where their business model was actually listable so that they can get listed.