KEY POINTS
- Government pledges support for enabling capital market environment.
- Securities lending and borrowing seen as critical for growth.
- Chengetedzai marks 10 years with plans for AAA rating.
The Zimbabwean government has committed to fostering an attractive environment for investors to participate in the nation’s capital markets.
Zimbabwe commits to investor-friendly capital markets
The Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) currently have a combined market value of $4.5 billion, with the ZSE accounting for $3.23 billion and the VFEX at $1.29 billion. However, currency volatility has limited the potential of both exchanges, leading to valuation inconsistencies and driving some investors away.
Speaking at the Chengetedzai Depository Company (CDC) Limited’s Securities Lending and Borrowing (SLB) Conference in Harare on Thursday, Elvis Daswa, senior economist in the Ministry of Finance, Economic Development, and Investment Promotion, reaffirmed the government’s support for the capital markets.
“The government continues to provide all the necessary support for an enabling environment on the capital markets,” Daswa said. “Key market infrastructures like Chengetedzai are making significant strides to attract both local and international investors through initiatives such as this.”
Daswa emphasized the critical role capital markets play in Zimbabwe’s economic development by providing long-term capital, mobilizing savings, and offering secure investment opportunities. He noted that the government remains committed to nurturing the sector.
The conference, moderated by Trevor Ncube, chairman of Alpha Media Holdings, also addressed the potential for Zimbabwe’s capital markets to become globally competitive.
Joshua Chimhanda, a member of the CDC board, called on industry stakeholders to confront the challenges hindering market growth and to embrace gradual steps to deepen market depth.
Securities lending and borrowing touted as market deepening tool
“Securities lending and borrowing provides one such step for our market as it ensures that investors are aware of the options and opportunities within the capital markets,” Chimhanda said.
SLB is a process where lenders temporarily transfer ownership of securities to borrowers in exchange for collateral and a fee.
According to Newsday, CDC shareholder Campbell Musiwa expressed optimism about the depository achieving a world-class AAA rating and praised the SLB initiative as a way to enrich Zimbabwe’s capital markets.
“The SLB will ultimately add to our capital market products, making them more attractive to both local and foreign investors,” Musiwa said.
The conference coincided with the start of Chengetedzai’s 10th-anniversary celebrations.
