Zimbabwe Stock Exchange - Zimbabwe Mining Indaba

Report
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Background
Brief outline of the ZSE
What are the investor concerns?
Raising capital by dealing in shares, bonds and
other long-term investments
Improving investor confidence to raise capital
Stock Exchange Listing Requirements
Way forward
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Zimbabwe faces formidable but not
insurmountable economic challenges
Inadequate clarity on Indigenisation and Economic
Empowerment Act
Economic stakeholders must work together
towards rebuilding the economy and attracting
fresh capital
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ZSE has adopted a number of measures since
2013 in the interest of ensuring that ZSE plays
an active role in mobilising funds
Risks associated with Lags in the settlement and
clearing system are being addressed
Governance improvements to enhance investor
confidence is cornerstone
Risks associated with:
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Clearing and settlement (T7)
ROI
Regulatory framework
Protection of Property Rights (Title &
expropriation)
Corporate governance (Disclosure, Compliance)
Policy Clarity/Consistency
Maturity & sophistication of the markets
Exit strategy for junior mines
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suitability of raising funds through listing
Stage of growth cycle of the company
Conditions for listing
Suitability of market conditions
General liquidity challenges
Maximizing value
Overview of international exchanges
London Stock Exchange, Toronto Securities
Exchange and Hong Kong Stock Exchange
examples of financial centers for financing Africa
projects.
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Disclosure and reporting
Annual financial reporting
Half year financial reporting
Major transactions pre approval by shareholders
Special disclosure rules for mining and exploration
companies
Competent person’s report
Foreign ownership
Foreign residents not to hold more than forty per
centum of the total equity of the company issuing the
security.
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Lack of variety in instruments traded on the
ZSE
Underperformance of Mining index
Reflective of unfavourable economic climate
and negative perceptions held by some
sectors with regard to indigenization laws.
4 mining companies currently listed
Difficulties in fund raising under current
economic conditions
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Government is making concerted efforts in reengaging the international community
A number of projects currently underway to
modernise Stock Exchange
-Demutualisation
-Automation (ATS)
-CSD
-New listing rules
-Data Portal
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The purpose of this Memorandum signed in
May 2014 is to provide the broad framework
for Demutualisation of the ZSE
Meeting between the principal stakeholders
being:
Government;
Stockbrokers;
SECZ; and
ZSE
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1. Reduction in transactional costs – the straight through data
processing (STP) offered on fully electronic trading platforms
(platforms with both functional ATS and CSD), ensures that
overall transactional costs are minimized.
2. Greater liquidity – in markets where full electronic trading
has been achieved liquidity (depth and breadth of the market), as
more investors are particularly attracted to the market
efficiencies brought about by market depth.
3. Greater competition – electronic trading promotes
international cross border trading thereby increasing global
competition and further enhancing liquidity and market
efficiencies that promote unbiased price discovery and
information symmetry.
4. Increased transparency – Electronic trading has meant that
the markets are less opaque. It is relatively easier to obtain
trading statistics (prices and volumes etc) about securities when
that information is flowing globally in electronic format.
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Zimbabwe Emerging Enterprise Market (ZEEM)
Current set-up restrictive to companies in early
stages of development
Two tier exchange will support companies in all
growth stages
Less stringent requirements
ZSE currently finalising framework
Bonds Market
ZSE currently working on development of a
market to allow trading of bonds
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Liquidity on the market is very low.
The ZSE is coming up with a robust framework to
facilitate capital raise whilst protecting investors
Improving investor confidence means moving
towards better compliance, modernised exchange,
timely accurate information, consistency
Investor education is on-going through road
shows, conference, workshops
Corporatisation of ZSE
Taping into foreign markets, better governance,
good quality listings & access to better sources of
finance by 2015
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Timing important when considering raising funds for
exploration and mining projects through an exchange
listing
Mining sector currently underrepresented on the ZSE
PPPs in infrastructure projects will work to harness
expertise and efficiencies of private sector, making
projects better attractive to investors.
Governance and reporting requirements for listing will
provide transparency in infrastructure projects
Depth offered by international markets, as opposed to
African exchanges, might be attractive for projects
seeking funding
responsibility for change is not
just on stock exchanges or listing
companies;
other players such as governments,
regulators, investors, standardisers,
professional bodies have a part to
play in embracing change for socioeconomic transformation”
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“The
……….ACCA
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