ZSE eyes three new listings

Martin Matanda

Three new companies are expected to list on the Zimbabwe Stock Exchange (ZSE) in the next six months, helping end the listing drought on the bourse.

One of the companies — Cassava Smartech Zimbabwe Limited (CSZL) — will list before year end, while the other two are likely to join the bourse in 2019.

CSZL will list on Tuesday by way of introduction following finalisation of all the conditions precedent to the demerger of the company from Econet Wireless Zimbabwe.

The local bourse last had a new company list in 2016 when Axia debuted the equities market after parent company, Innscor Africa, spun it off before subsequently listing its shares.

ZSE acting CEO Martin Matanda said the bourse expects more listings next year.

“We are hopeful of a few listings next year,” said Mr Matanda in an interview with The Sunday Mail Business on the sidelines of the Securities and Exchange Act amendment forum last week.

Although no finer details of the companies were provided, Mr Matanda indicated that one of the firms is in tourism and hospitality space, while the other is in manufacturing.

“It is too early to give out the company names, we have to wait for some formal announcements to be made before we give details, but we are very hopeful that there will be listings in 2019.

“But there is interest from one in hotel and leisure sector. There is also something from manufacturing sector,” said Mr Matanda.

Meanwhile, the debt market, which was reintroduced last year, has not been active and has not recorded any transactions so far.

“We are waiting for certain policy clarifications from Government. We are yet to list Government security, but we have prepared our platform thoroughly to handle the secondary market for the debt securities,” he said.

The debt market bounced back last year after nearly 20 years of being inactive.

Also known as the bond market, a debt market is a regulated financial system that allows the public and private sectors to raise money by selling debt instruments.

Debt markets have been used to finance large public sector infrastructural developments in other markets and it is hoped that the revival of the debt market will assist the economy in that regard.

Since adoption of the multi-currency system in 2009, Zimbabwe has witnessed pockets of success in mobilising funding through bonds.

According to the World Bank’s Bond Market Development Indicators report, more than 130 countries have bond securities traded on exchanges, and these countries cover nearly 77 percent of the world’s gross domestic product (GDP).

The report further highlights that the global bond market has grown from $25 trillion in 1990 to $57 trillion currently, while that of emerging markets has increased from $1 trillion to $4 trillion.

Experts say the debt market in Zimbabwe is poised for growth spurred by strong appetite for capital from both Government and companies, and the prospect of guaranteed returns in an economy short on funding alternatives.

But the market faces policy and regulatory challenges that need to be addressed.

“There is something we are waiting to happen from the issuer, that is Government, before we see any activity happening,” said Mr Matanda.