ZSE now a private company

Corporatisation of the ZSE will result in the separation of trading rights, ownership and management (independent board and executive management)

Corporatisation of the ZSE will result in the separation of trading rights, ownership and management (independent board and executive management)

The Zimbabwe Stock Exchange is now a fully fledged private company following the completion of the company registration process. The company is owned by Government

and stockbrokers under a 32-68 shareholding structure. The Ministry of Finance, through

acting principal director for Capital Markets Mary Takavarasha and ZSE board member representing stockbrokers mR Ben Gasura signed the company documents on behalf of the shareholders.

Artherstone and Cook handled the registration process.

Finance and Economic Development Minister Patrick Chinamasa is expected to hand over the certificate to stockbrokers at a date to be announced.

“The certificates were signed about two weeks ago and Minister Chinamasa will hand over the shares soon,” said Mr Gasura.

The stockbrokers’ shareholding will be split equally among the holders of proprietary rights. There are 48 stockbrokers.

The corporatisation will also enable ZSE to register as a stock exchange with the Securities and Exchange Commission as is required by the Securities and Exchanges Act.

Corporatisation of the exchange will result in the separation of trading rights, ownership and management with an independent board and executive management.

After the registration of the company, the shareholders are expected to convene a meeting to appoint a board.

This will improve governance as it will give the shareholders power to choose who best represents their interest in how the stock exchange can be managed.

The process is part of the demutualisation process which began last year following an ownership agreement between Government and the stockbrokers.

In the new company, stockbrokers will hold 34 percent of the exchange post demutualisation from the current 68 percent while Government will hold 16 percent from the pre-demutualisation stake of 32 percent.

With demutualisation, the ZSE would be exposed to good corporate governance; enhanced efficiency and transparency associated with publicly listed firms.

It allows the exchange to be listed on its own floor where investors would have the opportunity of investing in the self-regulatory organisation.

Further it allows the exchange to be competitive and to take up investments that could enhance returns for shareholders.

Demutualisation has become a global phenomenon. Exchanges that have demutualised include the Singapore Stock Exchange, Japan’s Nikkei, New York’s NASDAQ and Johannesburg Stock Exchange, among others.

Each of these exchanges has gained global recognition and patronage since they went public. – Wires.

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