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Investor protection fund grows


THE Securities Commission of Zimbabwe (SECZ) investor protection fund has grown to $4,7 million from nearly $3 million last reported in 2012 as confidence on the country’s capital markets gradually grows, an official has said.

Report by Victoria Mtomba

SECZ chairperson Willia Bonyongwe said the funds had reached the new figure by the end of 2012, adding that the funds were meant to protect investors against fraud and other malpractices, but did not cover day-to-day business risk.

Bonyongwe said the commission would this year push for more reforms at the country’s capital markets to grow the local bourse.

Part of the measures, she said, would be to encourage brokerage firms to have compliance officers who are responsible for separating depositors’ money from territorial money.

She said the automation of Zimbabwe Stock Exchange (ZSE) would bring vibrancy to the bourse whose performance has not been improving since 2009.

The market capitalisation of ZSE has been oscillating between
$3 billion to $4,2 billion since 2009 to date.

“I believe the reason is a lot of people are not really confident to participate on the market currently for reasons ranging from past experience governance issues to do with the listed companies themselves. There is tyranny of the minority by the majority shareholders.

“Other reasons have to do with the state of the listed companies. Very few have reasonable capacity and production,” she said.

“Automation will bring vibrancy as well as stringent corporate governance requirements. Obviously economic recovery will definitely increase aggregate demand and gross national savings available for investment. The new investment in mining and the Indigenous and Empowerment Sovereign Fund will add to the positive sentiments and increased market activity and consequently augment market capitalisation.”

Bonyongwe said the market had not been performing due to the subdued pension funds industry resulting from distressed industry and economy and low disposable incomes.

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