THE Zimbabwe Stock Exchange (ZSE) has set in motion plans to increase issuance of fixed income securities after noticing their decline over the years, compared to other exchanges, businessdigest can report.
This comes after the government scrapped the listing of a government bond on the Victoria Falls Stock Exchange (VFEX) last year, citing limited appetite on the market.
While some foreign fund managers have appetite for government securities for their clients portfolio, they do not have access to such securities through the ZSE trading platform.
Although the ZSE trading system is capable of trading debt instruments, listing of government bonds had also been derailed due so some policy issues that needed redress.
But this week, ZSE chief executive officer Justin Bgoni told businessdigest that they collaborated with other market participants to establish the Bond Market Association of Zimbabwe (BMAZ) to revive that space.
“What we have noticed in general is the decline over the years in the issuance of fixed income instruments on our exchange in comparison to other exchanges,” he said.
“As the exchange, our efforts are in reviving this space, which has prompted us to collaborate with other market participants, to establish BMAZ, which will be launched in April 2024 (this month).
“BMAZ aims to promote best practices, advocating for favourable policies, providing educational resources and professional development opportunities and acting as a representative for its members. We believe the launch of BMAZ will revive the bond market,” Bgoni said.
- Inaugural Zim investor indaba highlights
- Stop clinging to decaying state firms
- ZB explores options to tackle inflation
- Zim operations drive FMB Capital
Keep Reading
Referring to the US$100 million bond that Finance, Economic Development and Investment Promotion minister Mthuli Ncube had announced in his 2022 National Budget, Bgoni said feedback received had shown that the bond could not be issued because of a lack of interest from potential foreign investors and the high cost of an African Export-Import Bank guarantee, which would have increased the total funding cost.
BMAZ, which will be a voluntary organisation, is set to be formalised next week at a VFEX conference to be held in Bulawayo.
In 2022, platinum producer Karo Mining Holdings became the first to list a debt instrument on the waterfall bourse.
