Golden Sibanda and Enacy Mapakame
The Zimbabwe Stock Exchange could this year register its second initial public offering listing since dollarisation while three more companies are eyeing listings on the debt market.
Of the four prospective listings, two have submitted applications, which are under consideration. The proposals at hand intend to raise about $10 million. Of the $10 million, $7 million will be raised through listing of debt instruments while $3 million will be raised from an IPO.
ZSE acting chief executive Martin Matanda confirmed that four companies had expressed interest to list on the ZSE, three by way of introduction and the other being an IPO. Mr Matanda said the planned IPO was targeting to raise an amount of $3 million. A single company Mr Matanda said, had indicated plans to delist from the local bourse.
“All are local apart from one that is foreign and is incorporated in Mauritius,” he said. Of the four companies that have expressed interest to list on the ZSE this year, their businesses are in the financial services sector and investment holding (conglomerate).
The debt market bounced back this year after nearly 20 years of being inactive with the first listing witnessed in April when financial services firm Getbucks Financial Services Ltd listed the first tranche of its $30 million bond.
According to the World Bank’s Bond Market Development Indicators report, more than 130 countries have bond securities traded on exchanges, and these countries cover nearly 77 percent of the world’s gross domestic product (GDP). The report further highlights that the global bond market has grown from $25 trillion in 1990 to $57 trillion while that of emerging markets has increased from $1 trillion to $4 trillion.
In Zimbabwe, the debt market is poised for growth spurred on by strong appetite for capital from both Government and companies, and the prospect of guaranteed returns, in an economy short on funding alternatives.
“There is interest from both investors and issuers and certain indicators exist to that effect. Financiers are interested in investing their savings through a regulated platform as part of basic investment risk management strategy.”
On the other hand, there is limited capital available for long term funding and the revival of a fully functional debt market will provide some relief as it facilitates raising of capital through a regulated platform,” said Mr Matanda.
The ZSE is upbeat that listings of debt instruments will grow on the back of interest already received from investors and firms that want to raise capital.