BY Taurai Mangudhla
ZIMBABWE Stock Exchange-listed financial services group CBZ Holdings (CBZH) is on Thursday expected to launch its exchange traded fund (ETF) in the capital.
The fund will be under CBZH’s asset management arm, Datvest and will be known as Datvest Exchange Traded Fund. It will become the third ETF in the country after Old Mutual unveiled a similar product in January last year and Morgan & Co listed its multi-sector fund two months ago.
This comes after the financial services powerhouse early last month announced that its recent acquisition of a 31,2% stake in First Mutual Holdings (FMH) could result in the two firms’ insurance units merging.
CBZH chairperson Marc Holtzman told Newsday Business recently that the two insurers could share licences, reducing expenditure and capital requirements.
After the multi-million-dollar transaction announced last November, the two have been looking to leverage on their co-competencies.
Holtzman said: “That’s what building on strengths means.”
He said tying up the two businesses would have a positive impact on the group’s insurance cluster, which could immediately push profits to levels that only CBZ Bank could surpass.
“In addition, FMH has a wealth of experience and skills that are unmatched in the market and will be immediately unleashed to further grow the insurance book.
“There are also great opportunities to cross-sell the group’s client base with that of FMH leading to even more growth for both businesses,” the CBZ boss said.
Last year, Old Mutual Zimbabwe ZSE Top 10 ETF (OMTT ZW) was listed and came at an expense on the basis of investable market capitalisation listed on ZSE.
On listing the Old Mutual ETF, Zimbabwe became the fifth country in Africa to list ETFs, behind South Africa, Nigeria, Kenya and Egypt.
The Datvest ETF adds to various deliberate efforts by innovators, market players and regulators to deepen, widen and strengthen Zimbabwe’s capital markets and follows remarks by recently retired Securities and Exchange Commission of Zimbabwe CEO Tafadzwa Chinamo that the capital markets were doing well in terms of market intermediaries.
“We have enough players in all categories, namely brokers, exchanges, CSDs, asset managers and others. On the product front, until recently we had a very narrow product offering.
“I am glad to say that has changed.
“We, however, still do not have a vibrant fixed income market,” Chinamo said.
He said lack of investment in ICT systems, high transaction costs, lack of confidence in the Zimbabwe dollar by investors and high inflation hindered the growth of Zimbabwe’s capital markets. As a result of these challenges, Zimbabwe has no bond market and no derivative products.