Strict conditions to list on ZEEM

The Zimbabwe Stock Exchange (ZSE) says companies that exit the main bourse will only be allowed to join the soon-to-be launched secondary bourse after three years of delisting.


ZSE is working on establishing a secondary bourse, the Zimbabwe Emerging Enterprise Market (ZEEM) to allow listing by small-to-medium enterprises (SMEs) that would have failed to meet the requirements of the main bourse.

ZSE chief executive officer Alban Chirume told NewsDay that there will be no lateral transfer from the main board to ZEEM.

“It is proposed that no transfers can be made from the main board to ZEEM. Issuers who exit from the main board will be allowed to apply for listing on the ZEEM board after three calendar years from the date of their delisting. However, there is room for further reflection on this matter once the market has been launched,” Chirume said.

He said the trading and settlement framework for ZEEM was in place and the other condition still to be met was the setting up of a regulatory framework which he wished would be granted in the first half of the year.

ZEEM will require each applicant to have at least $250 000 (but not exceed $9,99 million) in share capital, provide audited financials for at least one financial period prior to listing, must have a minimum of 50 public shareholders, achieve at least 26% public shareholding and appoint a designated advisor.

The establishment of ZEEM comes after the ZSE has been experiencing increased problems due to the low economic activity, stemming from failure to attract investment from both domestic and foreign investors.

As a result, companies have been unable to meet the capital and listing requirements of the main bourse leading to them delisting from ZSE.

However, SME Association of Zimbabwe executive officer Farai Clement Mutambanengwe raised concern over delisted companies being able to come onto the ZEEM.

“The comments seem fair, except of course that part about delisted companies from the main bourse being able to then come onto this secondary bourse. It appears he is leaving leeway for this to be possible,” Mutambanengwe said. 

“The big question of course is how this new market intends raising capital, or making itself an attractive investor destination. Just setting up a bourse does not mean investors will just emerge.”

Mutambanengwe said a secondary bourse was critical for raising equity funding required to grow enterprises. Banks are currently not offering long-term capital required by companies to retool and expand operations.

ZSE has since last year accelerated efforts to establish a secondary bourse. Last month Finance minister Patrick Chinamasa tasked the new ZSE board chaired by Caroline Sandura to work on product development such as the introduction of a junior bourse for SMEs.

4 Responses to Strict conditions to list on ZEEM

  1. KKKKKKKKKKKKKK March 3, 2016 at 8:59 am #

    Is the newly to be established bourse Zimbabwe Emerging Enterprise Market (ZEEM) operate under a completely new management structure

  2. Zvusvumbwi March 3, 2016 at 11:19 am #

    The capital requirement of $250,000.00 is clearly out of reach of SMEs. Make it $50,000.00 as long as the business is viable and the idea of the bourse is to raise capital anyway.

  3. KKKKKKKKKKKKKK March 3, 2016 at 12:28 pm #

    I agree with you Zvusvumbwi on the minimum capital requirement. The figure is pegged too high given our current economic environment. Just a few companies will be able to meet that target.

    For the delisted companies from the main bourse, I think the time frame of three calendar years from the date of their delisting is too long given that they settle on that ground due to inadequate capital base. Keeping them out of the race for the next three years would be rather an unfair deal. Why not reduce the time frame to something like 6-12 moths.

    It has been said the trading and settlement framework for ZEEM was in place. May this framework be adequately publicised through various media so that investors would scrutinise and come up with the decision. On the other hand, did the ZSE guys carry out a thorough research to establish tentative support of this endeavour? Has the public and other players been extensively consulted before this initiative is put in place?

    Since the main stream bourse has been facing challenges in attracting investors due to the current draconian indegenisation and empowerment law, has there been enough ground work to counter the effects of such laws in the new system?

  4. Kufandada March 6, 2016 at 5:26 pm #

    Why should they restrict delisted companies? They just need to stipulate the maximum balance sheet size of $9,999,999.00. Even that level is too high.A small company should be defined with a maximum level of $1 million.We are talking about USD,and not Zimbabwe USD.

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