The process of demutualizing the Zimbabwe Stock Exchange has begun, according to Chief Executive Emmanuel Munyukwi, quoted in The Herald local newspaper. By selling shares in the exchange, the ZSE would hope to raise finance for its activities, including a long-delayed US$2.5 million computerization and electronic trading and settlement project.
According to the report, Munyukwi says the first steps include setting up a company to own the exchange, and speaking to the stockbrokers and other potential shareholders. He is quoted as saying: “The ZSE is a society of members or a club made up of stock brokers and we are engaging them as they will be the initial shareholders before other shareholders come on board.”
In his mid-term fiscal policy statement, Finance Minister Tendai Biti said that value should be unlocked in the ZSE by increasing its revenue streams for it to be a viable and attractive entity that would lure prospective shareholders to come on board. It could also eventually list its own shares. The first African stock exchange to demutualize was the Johannesburg Stock Exchange in South Africa.
The ZSE had been suffering the economic turmoil of the rest of the country, and was closed indefinitely in November 2008, after suspicious price movements and trading with unfunded cheques. It restarted trading on 19 February, with share prices and trading in US$ and the main indices reset to 100 each. Since then it has seen strong gains and the Zimbabwe Mining Index has climbed from 100 to 222.91 (28 July 2009) and the Zimbabwe Industrial Index from 100 to 152.54. Some share prices have risen very far.
