THE much-awaited demutualisation of the Zimbabwe Stock Exchange is expected commence after Finance minister Tendai Biti announced his ministry had reached an understanding with the stockbroking community on the issue, putting to rest initial disagreements over the ownership structure of the bourse.
He said last week it has been a painfully slow process but there were indications that the process could now proceed after reaching a common position with the stockbrokers.
Biti said the process had stalled because the stockbrokers had been ill-advised about the ownership of the exchange. The stockbrokers had sought legal opinion over the ownership structure of the exchange so as to determine whether the proprietary rights they held did not amount to ownership.
Biti has in the past spoken about the slow pace of reforms on the stock exchange and how it had stalled the modernisation of the country’s capital markets.
The major issue of contention was the protection of their interests with indications they would require a structure, which will adequately compensate them if they gave up ownership of the exchange.
The stockbrokers are said to have held a meeting last week where they agreed to make representations in terms of what they think about the ownership of the bourse.
They agreed to let the process go ahead according to what had been set out by the Finance ministry.
Demutualisation of the exchange is at the centre of the current reform initiatives being taken by the government surrounding the capital markets.
Once demutualised, the ZSE becomes fully exposed to market forces like any other business.
Globally, the first stock exchange to demutualise was the Stockholm Stock Exchange in 1993.
Today, all major stock exchanges around the world such as exchanges in India, Malaysia, Hong Kong, Singapore, Japan, Germany, Australia, the United States of America, the United Kingdom are demutualised.