Published by the government of Zimbabwe
22 July 2005
Harare — The Small and Medium Enterprises Business Developers' Association this week went on a study visit to the Zimbabwe Stock Exchange (ZSE) for small and medium entrepreneurs, following proposals to set up a secondary bourse for SMEs.
SMEs co-ordinator Mr Cornelius Hamadziripi said the visit was meant to familiarise them with the functions of the ZSE.
"The study visit comes in the wake of a recent announcement on the proposed introduction of the secondary market for SMEs and intends to prepare the participants for this launch by exposing them to the operations of the ZSE through discussions with officials.
"They also need to familiarise with what actually happens on the share-trading floor as well as getting more information on how the proposed secondary market will operate when introduced," said Mr Hamadziripi.
The small and medium-scale entrepreneurs had the opportunity to watch a live session of trading on the ZSE by various stockbrokers, after which they went into a question and answer session.
Some of the questions raised included how prices were determined on the stock market, listing qualifications, ZSE regulations, company shareholding structures, how shares can be increased, how long it takes for a buyer to pay a seller and how the market arrives at an index.
The SMEs representatives also made use of the opportunity to lobby ZSE to consider their concerns in the secondary market, such as the need to relax listing qualifications, since their capital bases were still small.
Acting chairman for the SME association Mr Peter Mabvudzi said the visit was a major step in the development of SMEs as it provided vision and the know-how on how to handle capital issues in a business.
He cited lack of capital as a major drawback for most small and medium enterprises, adding the secondary stock exchange would provide a platform for raising additional capital.
Urging small and medium entrepreneurs to run their businesses professionally, Mr Mabvudzi said all businesses should be licensed and all transactions properly recorded.
High levels of professionalism would lead to high investor confidence, he added.
The alternative stock exchange will go a long way in strengthening the local stock market, as small companies will be compelled to fight for a place on the established ZSE, in the same way soccer teams in the First Division aim to play in the Premier Soccer League.
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