Happiness Zengeni and Golden Sibanda
The Reserve Bank of Zimbabwe and the Zimbabwe Stock Exchange have assured foreign investors that the remittance of capital, capital appreciation and dividends, is first priority in the category of payments. This comes as volumes on the ZSE have fallen to record lows as most investors are experiencing delays in the remittance of capital.However, in a joint statement, the two institutions emphasised that settlement of transactions, capital appreciation and dividends, is in the first priority category of payments to ensure that foreign investors on the ZSE are not disenfrachised access to their capital.
Data from the ZSE shows that interest from foreign buyers continues to wane with purchases from that segment falling nearly 40 percent in the seven months to July.
Foreign bought turnover amounted to $48,69 million against $80,32 million realised in the same comparable period last year.
This was the lowest foreign inflow since dollarisation on a like-to-like basis, a situation market players attributed to the delays in remittances which usually drag for about two to three weeks.
Recently, Delta Corporation said that it had a payment backlog which included $15 million dividend payments.
According to Chengetedzai Depository Company’s monthly operating update, the value of the securities placed on the central securities depository increased to $1,18 billion from $1,15 billion as at June 30.
In terms of the market value, foreign investors account for 34 percent at $402 million, followed by insurance at 25 percent which is $288 million, while pension funds account for 18 percent at $219 million.
Corporate investors account for $176 million which is 15 percent while deceased estates, unclaimed shares trusts account for 6 percent at $76 million. Individuals and unit trusts accounted for 1 percent each at $15 million and $7 million respectively.
The RBZ also advised that the ZSE will continue to be priced in US dollars in spite of the introduction of bond notes with governor Dr John Mangudya emphasising that the bond notes were not currency but an incentive for exporters.
The RBZ in May announced that bank was working on a $200 million export incentive facility with Afreximbank to provide support for the payment of a 5 percent bonus on all export receipts, including tobacco and gold sale receipts.
“In simple terms, exporters will receive the incentive proceeds in US dollars and the incentive will be credited to the US dollar accounts in US dollar currency.”
Zimbabwe bond notes equivalent to the incentive granted will be brought into circulation alongside currencies within the multi-currency system and will be at par with the US dollar.
“No separate customer accounts will be maintained for bond notes and settlement of trades executed on the ZSE will take place in US dollar through normal banking channels,” read the statement