Nelson Gahadza Senior Business Reporter
The Securities and Exchange Commission of Zimbabwe (SecZim) expects at least three new exchange traded funds (ETFs) to list on the Zimbabwe Stock Exchange (ZSE) this year as the capital markets continue to grow.
ETFs are baskets of different types of investments such as stocks, commodities and bonds that are pooled into a single entity, which then offers shares to investors that are subsequently traded on major stock exchanges.
In Zimbabwe, Old Mutual pioneered the ETF listings when it listed the Old Mutual Zimbabwe Stock Exchange Top Ten Index Exchange Traded Fund (ETF) in January 2021.
Another securities firm, Morgan & Co in January this year launched its exchange traded fund with the listing of the multi-sector exchange traded fund (ETF) on the Zimbabwe Stock Exchange (ZSE).
SecZim acting chief executive, Gerald Dzangare at a media workshop in Harare, said the market would see more of these listings going forward.
“In addition to the Old Mutual ETF and the Morgan and Co ETF, there are three more coming on board of which two have already been approved and one is in the pipeline,” he said.
He said capital markets play an important role in economic development as they boost investor confidence, bringing in new capital.
Mr Dzangare said several products have been launched within the capital market in the last five years which has resulted in improved market activity.
The bourse will be introducing new products as it has been lagging behind in terms of the country’s investment choices.
The ETF industry globally ended 2020 with over US$5,5 trillion investments, according to Investment Company Institute statistics.
According to the ZSE prospective Exchange Traded Product issuers will have to prove that the underlying asset or security track is sufficiently liquid to satisfy the exchange such that there will be proper price formation in the product.
Mr Dzangare indicated that as the country implements the national Development Strategy 1 (NDS1) and Vision 2030 which aims to achieve an upper middle income economy, SecZim aims to see a population that actively participates in various investments that are being offered in the capital markets.
The Government, in the National Development Strategy (NDS 1) is largely focusing on mobilising domestic financing to fund the projects.
Meanwhile, Mr Dzangare said SecZim’s investor protection role is ineffective without collaboration and support from the media.
“Our investor protection role is ineffective without collaboration and support from the media fraternity, therefore, we value you as a key partner in our quest to adequately protect investors,” he said.
The workshop which was held in partnership with the Investor Protection Fund (IPF) was targeted on empowering financial and business reporters and editors on capital market operations and reporting.