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The Zimbabwe Stock Exchange is mulling establishing a revolving facility that will be used by small to medium enterprises wishing to undertake a primary listing on the impending SMEs bourse.

Chief executive Mr Alban Chirume told the 19th edition of Mine Entra held at the Zimbabwe International Trade Fair exhibition park in Bulawayo last week that work on the SMEs bourse was underway.

“We will set up a revolving fund for SMEs to raise funding (for their initial public offering) in the spirit of the Zim-Asset,” Mr Chirume said.

The ZSE is currently made up of 63 active stocks, but the majority are relatively big and well established companies as SMEs find it difficult to finance listings while stringent regulatory rules applicable to big entities would also be a nightmare to them.

Mr Chirume said SMEs intending to list on the bourse would access the financial resources they need to undertake pre-listing activities such as legal and financial aice provided by specialists.

“We are working on the revolving fund where SMEs will borrow before listing and once listed we would get back our money,” he said.

Mr Chirume said that the country’s premier securities exchange was now at a stage where it would ask the regulator, Securities and Exchanges Commission of Zimbabwe, to assist on listing rules.

The ZSE boss said there were a number of aantages that can be derived from having a company listed, which included access to a platform that can be used to raise funding to start or expand a business.

Further, he said in the future listed companies could use the exchange to fulfil their indigenisation and economic empowerment obligations and negotiations were ongoing with Government.

Mr Chirume also said that being listed increases a company’s visibility as many within that market would know about its existence. Listings also provide instant information about a firm’s value.

In addition, Mr Chirume said listed companies were more likely to find it easier to attract strategic partners needed to grow companies as investors come in the knowledge that a firm is well regulated.

He pointed out that despite the difficult economic environment prevailing in Zimbabwe, the ZSE has been one of the most liquid exchanges in terms of turnover against its total market value.

Meanwhile, Mr Chirume said that new listing rules for the Zimbabwe Stock Exchange should be ready by January next year.

ZSE is seeking to compel listed firms to, among a host of other new regulatory requirements, abide by the requirements rotate auditors to ensure transparency and good corporate governance as well as sufficient disclosure to enable investors to make informed decisions.

“There is need for the rotation of auditors as continuous use of the same auditors is becoming a cause for concern for the exchange. We have enough audit firms with skills to do the job for any listed firm in the country. We believe that is the way forward for the exchange to be more effective,” said Mr Chirume.

ZSE is also pushing for disclosures of executive salaries of listed firms, but some executives have threatened to de-list their respective firms from the exchange in a show of displeasure to the move.

Mr Chirume said ZSE was on the verge of tightening its screws on listed companies who are not compliant with listing rules and regulations.

“We are considering tightening our fining regime for non-compliance and we believe this will help in managing discipline on the exchange.

“ZSE wants to create a platform where investors will have the chance to know how compliant a company is on the exchange and get the chance to decide whether to invest or not,” said Mr Chirume.

Source : The Herald