BY Tafadzwa Mhlanga
The move made by Finance minister Mthuli Ncube to declare some classes of securities as shares or units has been welcomed by stock brokers who said this will help in expanding the capital market.
Last Friday, Ncube declared in terms of section 2(2) of the Securities and Exchange Act [Chapter 24:25] that the Real Estate Investment Trust Scheme, Exchange Traded Fund, Commodity Fund, Property Fund, Private Equity Fund, Venture Capital Fund and Warehouse Receipts as tradable on the local bourse.
MMC Capital director Itai Chirume said this was a positive move as it widens exposure and gives the companies a chance to bring more products on the stock exchange.
“For now, this does not have an immediate impact on the Zimbabwe Stock Exchange, but it is a positive move that will help in broadening our scope of capital market and it paves the way for more products on the market,” Chirume said.
“This also allows you to sell part of a property portfolio, take for example, if pension funds are invested in property, this move allows you to sell part of the property to sort out a problem and still own that same property.”
He added that the move had the potential to attract more investors.
“I believe this will deepen our capital generation. It has also paved the way for more investors as one can get exposure for a small amount of money. It gives you leverage as just a single investment gives you exposure. We can also consider this as financial inclusion and it attracts investors.”
Stockbrokers Association of Zimbabwe chairperson Bartholomew Mswaka concurred with Chirume adding that this will give the stock exchange opportunity to fulfil its duty of raising funds for investment for the industry and commerce.
“It is a positive development as it gives a bigger menu to the products on the stock exchange. This will give the stock exchange a chance to fulfil its primary role to raise funds. This will definitely widen the capital market. The stock exchange is a public asset and its duty is to raise capital for investment for the industry and commerce,” Mswaka said.