African markets

Three new ETFs to list on the Zimbabwe Stock Exchange

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 capital markets continue to grow.

ETFs are baskets of different types of investments such as stocks, commodities and bonds that are combined into a single entity, which then offers stocks to investors which are then traded on major exchanges.

In Zimbabwe, Old Mutual pioneered 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, launched its listed index fund in January this year with the listing of the multi-sector index fund listed on the Zimbabwe Stock Exchange (ZSE).

SecZim Acting Managing Director Gerald Dzangare at a media workshop in Harare said the market will see more such listings in the future.

“In addition to the Old Mutual ETF and the Morgan and Co ETF, there are three others 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 build investor confidence, bringing in new capital.

Mr. Dzangare said that several products have been launched in the capital market over the past five years, resulting in improved market activity.

The exchange will introduce new products as it has been lagging behind in terms of the country’s investment choices.

The ETF industry ended 2020 globally with more than $5.5 trillion in investments, according to statistics from the Investment Company Institute.

According to the ZSE, potential issuers of exchange-traded products will need to prove that the underlying asset or security trail is sufficiently liquid to satisfy the exchange so that there will be appropriate price formation in the product.

Mr. Dzangare said 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 offered on the capital markets.

The government, in the National Development Strategy (SDN 1), largely focuses on mobilizing domestic finance to fund projects.

Meanwhile, Mr. Dzangare said SecZim’s investor protection role is ineffective without the collaboration and support of the media.

“Our investor protection role is ineffective without the collaboration and support of the media fraternity, therefore, we value you as a key partner in our quest to adequately protect investors,” he said.

Held in partnership with the Investor Protection Fund (IPF), the workshop aimed to empower financial and business journalists and writers on capital markets trading and reporting.