Finsec plans to introduce new products

ZIMBABWE’S sole alternative trading platform (ATP) provider Financial Securities Exchange (Finsec) is mulling plans to introduce other financial asset products such as exchange-traded funds (ETFs) and cater for the small to medium enterprises (SMEs) in a bid to expand the Zimbabwean market.

By Taurai Mangudhla

After successfully listing Old Mutual Zimbabwe (Omzil)’s US$68 million worth of B-class shares that were issued under the indigenisation programme, Finsec CE Collen Tapfumaneyi told businessdigest last week that the introduction of ETFs — which are an investment fund traded on stock exchanges much like stocks and hold assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day — is among the company’s priorities.

“We are actually looking at deepening our product range; we are not just going to be looking at equities so we have other products lined up and as a hint exchange-traded funds are some of the things that are trending now in the world and basically we would like to see what happens if an asset manager or any investor who is reputable has got a portfolio of their assets and they want to dispose they do it over the counter,” Tapfumaneyi said, revealing that Treasury Bills would also be considered for trade under the ETFs.

He said his company was awaiting regulatory approval for the new products.

“On Treasury Bills, you can call someone when you are in a bit of a liquidity squeeze and say maturity is two years but now I need cash. So very soon we will come up with a concept which you come to the exchange and make those things available to the public, you and I can actually have a piece of the Treasury Bills through ETFs. You group those things and come and list them through Finsec,” added Tapfumaneyi.

The move, he said, would enable the common man, who could not access Treasury Bills because of their size, to buy a small portion of the paper.

“Can’t we look at small bonds as well? Is it difficult for a council to upgrade their water treatment plant by enabling their citizens to come in and own that plant because basically what you are doing is you are investing and at the same time enhancing service provision to yourself. You participate in the investment and get a return, which is the social transformation we want to see,” Tapfumaneyi said.

He indicated some rural district councils had expressed interest in raising funds on their platforms, some of which are yet to be licensed.

Tapfumaneyi said his company targets at least 20 new listings on the ATP and is considering creating a product that caters for SMEs.

“Our targets are in two categories, the first is obviously the listing and we believe in a year or two, based on the research that we have done, we should easily surpass 20 listings and that’s a very conservative figure. That’s on the listings of the main product that we are looking at which is equities,” he said.

“We are going to be rolling out a programme in which we will be taking it upon ourselves to unearth certain rough diamonds out there. Bring them to light through our platform and showcase what Zimbabweans are capable of doing.

They are there so we are focussing on that. In fact, we are just finalising a few things around the rules around the new products, that’s why I am speaking in a bit of riddles. Once our regulator approves it, we will advise,” he said.

Giving an update of the Omzil listing, Tapfumaneyi said the Omzil share sat at about 82 US cents in the first four days of trading with about 190 000 shares having changed hands.

“It has been reasonably good, considering that this whole concept is new, has not yet been well publicised. People don’t quite understand it but we have seen quite a lot of trading for the first three four days. I think almost 190 000 shares changed hands just two days ago so this is as we are still onboarding brokers and all that so I think it was a very good start,” he said.