ZSE in foreign currency headache

 ZSE in foreign currency headache
Published: 03 May 2019
THE Zimbabwe Stock Exchange (ZSE) is now looking at collaborating with other bourses in order to assist distressed firms raise foreign currency as forex shortages worsen in the country.

Foreign investor interest in ZSE shares declined after the introduction of the managed inter-bank foreign exchange market which has failed to attract valuable buyers as the formal exchange rate remains unattractive.

Zimbabwean companies believe raising capital through issuance of stock on the local market in the local RTGS dollar no longer makes sense.

The ZSE's plans come at a time the local bourse is working on attracting young companies as well as government public enterprises to be able to raise own funds on the market.

While it is not entirely a new phenomenon, ZSE chief executive Justin Bgoni told businessdigest on the sidelines of the bourse's initial public offering masterclass on Tuesday this week that a number of investors at the moment felt discouraged and had to find ways of benefitting.

"Companies want to raise money but RTGS is no longer good enough. And that's the reality of the situation. The thing that we are looking at is to say how you can raise money both in RTGS and US$ at the same time or do we need a collaboration with other foreign stock exchanges and do dual listings. It's not a new concept, if you look at South America they have such," he said.

Of late, a number of companies have sought dual listing as a way to raise foreign currency for various capital expenditure requirements.

At the moment, Bgoni said, the local bourse was working on the modalities of the programme that will include rules that companies have to abide by as the stock exchange seeks to make dual listing easier.

He said the situation has remained dire on the ZSE since the introduction of the February 20 Monetary Policy Statement, especially in relation to how the inter-bank forex rate has an impact on foreign investors.

Bgoni said a listing was expected on the bourse this year with better prospects more next year.

"Prospects are looking good. Government at the moment owns most of the companies on the stock market. A company like POSB is a good candidate, it's well-run and doing well.

There is no reason why it should not be on the stock market. It also makes sense for NetOne and TelOne to come on board and raise finance," he said.

The initial public offering masterclass was held under the theme: "Promoting Access of the ZSE Platform to the Public and Private Sectors as a Gateway to Raising Capital".

The workshop was aimed at opening up the ZSE to companies that have the potential to list, discuss the benefit of listing and explain the listing process as well as the requirements.
- the independent
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