eBusiness Weekly
Enacy Mapakame
The Zimbabwe Stock Exchange (ZSE)’s plan to introduce new products on the local bourse will broaden the market providing investors with more options, analysts have said.
This comes as the local equities market has already invited stakeholder input for its Specialist Listing Requirements, the draft of which is now ready.
According to a ZSE notice, it follows that the local bourse will introduce new products to the market, which stakeholders must provide contributions towards listing requirements before its approval by the regulator.
The new products in need of the new listing requirements are real estate investment trust securities (REITs), warrants, structured products, exchange traded notes, exchange-traded funds (ETFs), asset-backed securities and depository receipts.
“This is a positive development as it will broaden the products available for trading,” said an analysts with MMC Capital.
“These are products that will make our capital markets deeper as there are more options to choose from for investors,” he said.
Currently, the market is confined to trading equities, that is shares and debt.
ZSE has already made strides towards expanding the market with invitation made for contributions towards listing requirements of the anticipated new products.
“The Zimbabwe Stock Exchange hereby notifies all stakeholders that the Draft Specialist Listings Requirements is now available for comments for the period up to June 29, 2018.
“The ZSE therefore welcomes input on the proposed Specialist Listing Requirements and any other issues related to their trading thereof. All comments will be considered in the preparation for the final draft, which will be submitted for regulatory approval,” said ZSE acting chief executive officer Martin Matanda.
One of the products, the real estate investment trust securities will allow investors to buy into a portion of a specific building as opposed to buying shares of an entire property firm such as First Mutual Properties.
A number of buildings are put into a portfolio, which investors can put their money into, thus investors can buy into a specific building they want.
Another product, depository note- is a negotiable financial instrument issued by a bank to represent a foreign company’s publicly traded securities asset backed securities are purchased primarily by institutional investors with the intention of raising funds to procure assets for instance equipment for infrastructure projects.
Real Estate Institute of Zimbabwe (REIZ) president and Integrated Properties chief executive officer Mike Juru, said ZSE was moving in the right direction by introducing issuance of real estate investment trust securities on the bourse.
He said this was in line with global standards and international best practice and would open up the real estate sector to fresh capital.
“This is a welcome development and will change the face of the real estate sector as well as attract foreign money.
“It means investors will put in their money in a more structured and transparent industry,” he said.
Real estate investment trusts often trades on major exchanges like other securities and provide investors with a liquid stake in real estate.
Investors have guaranteed dividends coming from rental incomes.
Listing and trading on the local bourse is governed by a set of regulations that companies are required to comply with.
Several listed firms have been suspended from the bourse for failing to comply with the rules and regulations such as timeous publication of financial results, publishing notices and results of annual general meetings to shareholders as well as irregular activities.
Currently, companies such as CFI Holdings Limited, Cottco Holdings Limited and PG Industries Zimbabwe Limited are suspended for failing to meet various listing obligations.
