herald-online-thTHE suspension of Meikles Limited by the Zimbabwe Stock Exchange on Monday has attracted mixed feelings. While Meikles has questionable corporate governance systems, the manner in which the ZSE handled the suspension of trade in the company’s shares will no doubt hog the limelight. Whatever the verdicts and opinions are, the truth is the stock exchange does not need this kind of controversy, more-so at a time when Government is working hard to attract foreign investment into the country.

Investors are very sensitive and they can easily react to any news that comes out. A lot of perceptions that Government is fighting against now are as a result of bad news from certain quarters.

Without notice to Meikles, the ZSE suddenly suspended trade in Meikles’ shares without formal communication to the company in a development that has raised questions about its integrity, credibility and capacity to appropriately address issues relating to the stock exchange as one of the most important institutions for economic growth in Zimbabwe.

Prior engagement before the announcement should have been appropriate particularly to an issue which has been subject to debate over the past year.

MPs Eddie Cross and Munyaradzi Kereke have raised concern about this issue while various market analysts questioned why the financial results of the company were approved in the first place.

With Meikles, naturally, approaching the courts of law to seek recourse following the manner in which the ZSE handled the issue of its debt with the Reserve Bank, one can only guess that a potentially bruising legal battle is brewing, which may seriously damage the bourse’ standing and most importantly, Zimbabwe.

Does the ZSE need this court fight?

It has the potential to soil its image and credibility as the first port of call for foreign investors who currently dominate trading on the bourse at a time most Zimbabweans are cash strapped.

In recognition of the importance of foreign investment to economic turnaround and execution of programmes under the Zimbabwe Agenda for Sustainable Socioeconomic Transformation, the Government has gone on an overdrive to attract FDI by re-engaging the international community, including western countries.

After a decade of economic challenges, this is the time Zimbabwe requires liquidity the most, including from foreign investors, especially at a time when the country has suspended printing of money and relies on FDI, exports, donor funds, lines of credit and portfolio investments to drive economic activity in the country.

The ZSE is a mirror of what is happening in the country as well as a platform through which foreign investors can freely and easily take positions within local companies of their choice and any mediocre handling of the affairs of an important institution such as the ZSE is detrimental to the economic growth of Zimbabwe.

If the stock exchange mirrors what is happening in the economy, what kind of reflection are we giving to the investors?

It’s just an image of chaos! Government is putting one brick at a time; the ZSE has just removed four bricks at one go.

It is our humble view that all progressive Zimbabweans must help to rebuild the economy from where they stand.

As such, the ZSE is a key ally in efforts to attract the much needed financial resources into the country and should not undo the tremendous progress the Government has made towards reconstruction of the economy.

The ZSE must also look itself in the mirror, conscious of the reality that it cannot afford to lose more listed companies at a time when a number of entities have already delisted citing cost related challenges of maintaining their listings dues to the difficult economic situation in the country, the ZSE may be left devoid of members.

Such a development is certainly unfathomable considering the grave consequences.