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The Securities and Exchange Commission of Zimbabwe has said investment in shares promotes a savings culture necessary in the provision of low cost capital.

Chief executive Tafadzwa Chinamo told parliamentarians during an awareness workshop last week that capital markets offer cheaper value preserving investment options for economic growth and development.

“If a part of our savings continue to flow to industry Zimbabwe’s labour, management and capital can continue to build new factories and infrastructure.”

He added that this applied to anyone including the small trader in Gazaland Highfields.

“This is because the stock exchange plays the important role of providing the “link between commerce and industry and capital market”.

Mr Chinamo noted how the stock exchange had been used to grow businesses as early as 1946.

“Between 1946 and 1952, the Zimbabwe Stock Exchange raised money for over 40 companies by facilitating the issue of various shares.

“Greatermans raised pound442 500 in 1948 and in 1951, issued more shares, thus raising its issued capital from pound442 500 to pound500 000.

“Gatooma Textiles raised pound100 000, Connocks Motor Holdings pound550 000, and Falcon mines pound453 902. We can do it too.”

“Investments in listed shares gave this country the infrastructure and industrial prosperity so lacking in many parts of Africa.”

He added that the central Government raised a number of loans in order to develop the country’s public infrastructure. Between 1950 and 1953, the government was involved in a four-year programme of capital development.

The plan involved spending more than pound48 000 000 over the four years on roads, bridges, dams, houses and other public amenities.

Zimbabwe Stock Exchange chief executive Alban Chirume said the bourse would this week meet with City of Harare officials as part of efforts to bring awareness to the activities of the exchange especially around the issuance of municipal bonds.

“As you aware, the City Council can issue municipal bonds. However, overall the introduction of a bond market is still work in progress as the process of getting regulatory approval had been slow.

Deputy Finance and Economic Development minister Dr Samuel Undenge said capital markets are a significant component of the financial services sector as they offer a long term resource mobilisation platform for business communities for economic developmental purposes.

“Capital is the lifeblood of businesses, which in turn are the engines of job creation and economic growth,” said Dr Undenge.

Source : The Herald

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