Expedite ZSE Re-Opening: Analysts

There is growing criticism of government’s lack of urgency to lift the suspension of trading on the Zimbabwe Stock Exchange (ZSE) with analysts urging authorities to expedite the process for the benefit of local businesses, 263Chat Business can report.

The stock exchange is a primary economic indicator of growth, attracts investment and help businesses to raise capital among other purposes.

Last month government suspended the local bourse on allegations that the exchange was being abused to undermine the local currency by creating excess liquidity in the economy, a move widely criticized as being influenced by political undercurrents.

“It’s now 30 days after the Zimbabwe Stock Exchange (ZSE) was suspended abruptly without regulatory clarification to the hundreds of foreign and local investors who hold assets on the bourse,” financial markets expert, Victor Bhoroma said.

“The suspension has dealt a major blow to future prospects of attracting foreign investment into the economy while negatively impacting cash flows for the active counters and institutional investors such as pension administrators and insurers. The 2 weeks lag time for the full investigation shows lack of urgency on economic reforms and underlines the dangers of knee-jerk policy political announcements,” he added.

Last week, Finance and Economic Minister, Mthuli Ncube said government was waiting for investigations by the Financial Intelligence Unit (FIU) to be finalized between this week and next week.

“It’s just a matter of going through the paces and receiving the reports once the investigation is complete. It should have certain recommendations and we will follow those recommendations so that we are systematic. All we are trying to do as regulators is to intervene the right way; is to be positive about the issue, make sure there’s some discipline in our private sector activities,’ the Minister said.

However, market watchers remain wary of the lengthy period the bourse has been inactive especially at a time when most businesses are staggering from the effects of the Covid-19 pandemic and are in need of some form of stimulus to boost operations.

“Government just shot itself on the foot by suspending the ZSE from trading because it defeats the whole purpose of opening up of the economy as a safe investment destination. It’s taking long to reopen the exchange and it sends negative messages to potential investors who already were taking a wait and see approach on Zimbabwe,” economic analyst, Pepukai Chivore weighed in.

But analysts are also wary of political pressure on the operations of the ZSE following recent utterances by the ruling Zanu pf party calling on government to  delist the global conglomerate, Old Mutual from the local bourse.

 

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