via ZEEM listing requirements being assessed – NewsDay Zimbabwe March 13, 2015
Listing requirements for a bourse to cater for small and medium enterprises are being assessed to see whether they are not in conflict with existing legislation, an official from the capital markets has said.
Zimbabwe plans to launch the Zimbabwe Emerging Enterprise Market (ZEEM) to cater for companies that do not meet the requirements to list on the Zimbabwe Stock Exchange (ZSE).
Speaking at the 3rd Annual Zimbabwe Small to Medium Enterprises Banking and Microfinance summit 2015, ZSE official Anymore Taruvinga, said the listing requirements for the secondary bourse have been drafted.
“As we speak right now we have made a step ahead and the listing requirements are with the legal drafters to see if they are not in conflict with existing legislation,” he said.
Taruvinga said for the SME bourse the minimum equity was $250 000 while the minimum public shareholders will be 50. The minimum number of shares to be issued will constitute 26%.
He said according to the survey that the ZSE conducted the issue of funding for the junior market will be a challenge due to funding constraints.
Taruvinga said the bourse was targeting to have $1 million that would be administered by local banks with a repayment period of six months.
“The fund will be to meet the cost of listings on the Zeem. The contributors to Zeem include government, local banks, ZSE, donor agencies and venture capital,” Taruvinga said.
He said the listing expenses that the SMEs will have to incur include sponsoring brokers’ fee, fees for accountants, lawyers, underwriters, Securities Exchange Commission and ZSE among others.
“We are still negotiating with some of these service providers on the fees,” Taruvinga said.
He said the listing costs should be between 5 to 6%.
Taruvinga said the ZSE was in the process of reviving the debt market and finalising the framework on the listing and trading of debt securities.
The Zimbabwean economy has been transformed from being a formal economy to an informal economy with 75% of its population now in the informal sector.
Estimates say at least $4 billion was circulating in the informal sector.
The transition to an informal economy has made it difficult for the Zimbabwe Revenue Authority to tax the sector depriving the economy of revenue.