Zimbabwe has demutualized its stock exchange which had operated as a mutual society for more than five decades and plans to list the public company on the local bourse.
Established in 1946 as the colonial Rhodesia Stock Exchange, the local bourse was renamed the Zimbabwe Stock Exchange (ZSE) at independence in 1980 and continued to operate as a mutual society until now.
Speaking at the share certificate issuing ceremony Thursday, Finance Minister Patrick Chinamasa said the demutualization transforms the Zimbabwe Stock Exchange (ZSE) from a statutory body into a viable public company.
The completion of the demutualization exercise follows an agreement signed by government and brokers last year.
Under the arrangement, government will initially own 32 percent shareholding and brokers 68 percent, which will eventually be reduced to 16 percent for government and 34 percent for stockbrokers.
The remaining 50 percent will be held by private financial institutions and individuals.
“The main crux of demutualization is separating ownership of the exchange from management in line with internationally accepted code of corporate governance.
“The process will see the exchange being transformed from its current not for profit status to a profit making organization,” the minister said.
He said the eventual listing of the exchange would improve governance and operational efficiency as well as increase capacity to attract foreign investors.
The minister challenged the exchange to list some of the idle assets of state enterprises to unlock their value and contribute to economic growth of the country.
The exchange, the minister added, provided a perfect avenue for resource mobilization to rebuild the economy, and urged entrepreneurs to come up with new ideas that would help attract much needed foreign investment.
There are 66 companies listed on the ZSE with a market capitalization of 4.8 billion U.S. dollars. Enditem