The Herald (Harare)

19 February 2013

Zimbabwe: Stockbrokers Have No Case: Chinamo

STOCKBROKERS are fighting a losing battle in their bid to stop the privatisation of the Zimbabwe Stock Exchange, Securities Commission of Zimbabwe chief executive Mr Tafadzwa Chinamo has said.

Addressing journalists at a financial reporting workshop organised by Delta Corporation in Kadoma last week, Mr Chinamo said the stockbrokers' argument was weak and not likely to significantly impact on the demutualisation of the bourse, now set to continue as scheduled.

He added that although the two parties were still negotiating, it was highly unlikely that the stockbrokers would win the case.

"You own something because you set it up, bought it or if the owner gave it you," he said. "But this is not the case with the stockbrokers. They were just entrusted with the running of the bourse and not its ownership."

Stockbrokers took the unprecedented step of seeking seek legal counsel to stop the process of demutualisation and the subsequent listing of the private company on the ZSE.

Mr Chinamo maintained that the stock exchange was established by an Act of Parliament and had, over the years, been run by its members, the stockbrokers, which did not make them its rightful owners.

He added that while the stockbrokers were fighting the privatisation of the stock exchange, it had become the common trend for stock exchanges the world over to demutualise and then list on the bourse as a private company.

He said closer to home, the Johannesburg Stock Exchange had already done the same, which had proved to be a profitable move. He added that although considerable progress has been made towards demutualisation of the bourse, there was need for it to be fully automated as soon as possible.

"For demutualisation to occur, there is need for the ZSE to be automated and if this happens, the bourse will trade between US$5 million to US$6 million daily, instead of the US$1 million to US$2 million that is currently being traded," he said.

Mr Chinamo said although the offer by Econet to give the ZSE a loan for the automation was welcome, the bourse also lacked the internal capacity to automate.

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