Inaugural capital markets indaba: What they said ...

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Inaugural capital markets indaba

Valerie Muyambo, CABS chief finance officer

Audit opinions remain important. Sustaining transparency and accountability in financial reporting remains a key priority. Investors tend to not understand country-specific opinions.

Therefore, regulators, policymakers, preparers, auditors, must work towards ensuring that Zimbabwe is understood beyond our borders.

Sandra Musevenzo, Zimbabwe Association of Pension Funds director general

Economic stability is a key factor needed to grow the industry’s income. Confidence issues need to be addressed as a matter of urgency while fixed income market restoration is a must. It is also critical that there must be engagement and collaboration among all key stakeholders on the capital markets.

Lyndon Nkomo, Zimbabwe Stock

Exchange head of legal, compliance and issuer regulation

There is a correlation between good governance and organisational performance. Better governed companies are likely to be more successful than poorly governed companies. Thus, good governance is important and is key in building trust with investors and public officials.

It provides stakeholders and investors with the detailed direction of the company, promotes long- term financial viability, facilitates capital raising, translates to rising share prices and decreases the potential for financial loss, risks, and corruption.

Noel Mahombera, Zimbabwe Investment and Development Agency chief business

development officer

The capital markets have a critical role to play in mobilising long term capital to finance development. In mining, we have over 60 known minerals. Annual performance of the mining sector fell by 10% from US$5,4 billion in 2022 to US$4,9 billion in 2023. Despite the potential of the mining sector, there have been challenges in its development. These include outdated mining and support infrastructure, unsustainable mining practices and limited access to capital.

However, there are many opportunities including but not limited to exploration, extraction, retooling and beneficiation.

Chester Mhende, Shelter Incorporated MD

There is a need for financial institutions to think long term and not restrict their lending to government policy. Issuing mortgages will have positive ripple effects and even more revenue for industry from valuation fees, insurance, etc. There is a need to revive building societies.

The market must plan beyond 2030 if we will grow.

Financial institutions need to stick to their core business of lending and providing capital as opposed to competing with those they are supposed to provide capital and potentially placing at risk their depositor’s funds. Just like financial institutions, which are regulated institutions, development players also need to be licensed and regulated so the sectors are ring-fenced for overall benefit.

Faith Zaba, Zimbabwe Independent editor

Media and capital market players can unlock significant value and drive economic growth. To achieve this, it is imperative that the Zimbabwe Stock Exchange and Securities and Exchange Commission of Zimbabwe ensure timely dissemination of capital market developments to the media.

Regular workshops for journalists on financial market reporting can enhance their understanding and coverage of the industry.

Justin Bgoni, Zimbabwe Stock Exchange CEO

There is a need for relaxation of restrictions on the exchange to increase trading volumes and attract more investors, support in gazetting governing rules and regulations that supports the growth and development of the exchange and assistance in revising or repealing outdated laws and regulations that hinder the growth of the exchange.

Shelton Sibanda, Imara Capital CEO

We need capital to come in and we need foreign investors to come back and help us bring the necessary capital. The locals in Zimbabwe are local investors who do not have enough capacity or enough funding to support trading so that we can realise the fair value. If anything, locals on a net basis are taking out from the stock market, which further puts pressure on the prices and everything.

When you have a depressed asset or you have depressed assets, it means your confidence or your ability to attract new capital (is affected).

Because when the assets are not performing in quotes or when they are depressed, it means the investors would feel or investors would feel like you are not doing a good job. So, your ability to attract new capital is very limited, especially when you are in an environment like Zimbabwe, where you have had issues over the last couple of years. So, the ability to attract assets where the fair value or you have a perennially depressed stock market, both ZSE and Victoria Falls Stock Exchange is a bit of a problem.

Sibongile Moyo, Nedbank Zimbabwe MD

Investors or shareholders provide financial capital for businesses (issuers) from equity and debt investments. Investment subscribers at institutional and individual retail level can have goals to create value from retained earnings, capital accretion (NAV), share price (price-to-book), dividends.

Value can be preserved by following good environmental, social and governance (ESG) practices to ensure a sustainable financial trajectory for the business and society in the long term. On the other hand, goals are achieved via boards of directors of their investees and via voting rights. On material matters, there are leading ones posing risks and with material impact on long term value creation and business resilience.

Anymore Taruvinga, Securities and Exchange Commission of Zimbabwe CEO If we are to focus on capital markets, again, you find five themes that speak to what is happening

currently. It is probably theme one, on core market infrastructures, which we have also experienced locally, where you find that technology is promoting a lot of decentralisation and the reduction of physical assets, which we have also witnessed in our local markets. I think prior to 2016, we only knew the stock exchange, the Zimbabwe Stock Exchange. To date, we have got four registered securities exchanges, 223 capital market players. So there are a lot of players that have come in because tech has enabled businesses to set up without the normal brick and mortar type.

Enerst Denhere, Mutapa Investment Fund deputy chief investment officer

To function, capital markets need a critical mass of investors, such as pension funds and insurance companies. These investors play a catalytic role in market development and add liquidity to the system. Infrastructure projects are largely reliant on United States dollar denominated bank loans to finance their development.

Current local loans seldom offer the length of tenor required for successful infrastructure developments.

Limited hedging mechanisms for exchange risk. Some innovative foreign exchange currency linked bonds have, however, been issued.

Mike Juru, REITs Association of Zimbabwe chairperson

Real estate investment trusts raise capital for the purposes of an asset. More capital raised means more development and purpose of property which increases returns in the long run and taxes to be collected along the property development value chain.

The profound impact that a well-designed policy framework can have on the growth and development of capital markets cannot be understated. By fostering an environment that encourages investment, provides tax incentives, and establishes clear regulatory oversight, governments can play a pivotal role in unlocking the full potential of these vital investment vehicles.

William Manimanzi, Reserve Bank of Zimbabwe deputy director financial markets

For a vibrant and robust capital market, there is need to have the following:-Stable macroeconomic environment, characterised by low and stable inflation and interest rates;

conducive regulatory environment; diverse and broad investor base; strong institutions – some of our institutions are on the verge of closing due to the operating environment, worsened by the delay in the announcement of the monetary policy statement; appropriate and requisite skills – need for extensive training on subjects like bond pricing, derivatives etc. The Reserve Bank will endeavour to establish a stable macroeconomic environment that enables financial markets to flourish. We believe we are on the right track and we should “walk the talk.” Complementarity between fiscal and monetary policy is critical to achieve the desired objectives.

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