On the 19th of October, the Securities exchange commission of Zimbabwe published its notice of new licences. The document informs the public of licences awarded by the regulator. The headline grabber was the licencing of the Southern Africa Mercantile Exchange. Also of interest was the licencing of a Gold Exchange Traded Fund.
The Securities Exchange Commission of Zimbabwe is the regulator that oversees all investment and securities matters in Zimbabwe. They are responsible for the laws applicable in capital markets, collective investment schemes and other investment markets or products. The regulator’s job is to ensure that laws are adequate to address the terrain and scenarios the market will face and to pursue any breaches of the law. Markets thrive when there is stability in both the underlying economy and the rules governing the capital markets.
Southern Africa Mercantile Exchange (SAMX)
The awarding of a licence for the Southern Africa Mercantile Exchange is interesting. A mercantile exchange is a market that deals in the sale of commodities, usually on a futures contract basis. They can deal with agricultural commodities but can extend to gold, oil and other precious extractives. This licence has been awarded to the Zimbabwe Stock Exchange.
If you’ve been following the market news closely, you may remember the launch of Finsec’s Zimbabwe Mercantile Exchange, which came with an application ready to go. The management at the ZSE has not been shy to go after areas that already have a single player to offer competition. The Securities depository debacle and the online trading platform cases are two good examples of this.
Gold Shares ETF
For collective investment schemes such as the Cass Saddle Agriculture (CSAG) ETF, Datvest Modified Consumer Staples (DMCS) ETF, Morgan & Co Made in Zimbabwe ETF (MIZ), the upcoming maiden Real Estate Investment Trust, the Tigere REIT and something called the Nurture Gold Shares Exchange Traded Fund. While details are not available yet, it’s not hard to imagine that this is likely to be an ETF that invests in shares of gold-producing companies. That will be interesting, to say the least.
These two developments, especially if the latter comes to fruition, will certainly widen investors’ capital market opportunities and alternatives. We have lamented the lack of short-term and long-term investment alternatives for Zimbabwean retail investors, which is certainly the shot in the arm that the markets need. As for the mercantile exchange, the ZSE rarely wades into unprofitable waters.