Capital markets regulator targets retail investors

HARARE - Capital markets regulator, the Securities Exchange Commission of Zimbabwe (SecZim), is targeting to attract more retail investors to participate in securities trading, a senior official has said.

SecZim chief executive Tafadzwa Chinamo disclosed this week at a ceremony to list Untu Capital’s debt instrument on the Financial Securities Exchange (Finsec) platform.

“Participation in securities trading by the retail segment of our community has remained low and this is one area that is receiving due attention by my commission.

“I am delighted to note that Untu Capital reserved a portion of their medium term note to retail investors who were able to participate in the initial public offer via mobile and online-enabled platforms,” he said.

He added: “The commission is pushing ahead with investor education programmes designed to ensure our investors are aware of the products and services in the market as well as their rights and obligations as responsible investors.”

Untu Capital, one of the country’s leading microfinance institutions, became the third company to list and trade on Finsec, Zimbabwe’s alternative securities trading platform.

The Infrastructure Development Bank of Zimbabwe and Old Mutual Zimbabwe are other companies that have listed on the Finsec platform.

The microfinance enterprise wants to raise $5 million through initial public offers to support small to medium enterprises. This will be done in three tranches.

The first tranche note issuance opened in December last year to raise $1 million.

But, total subscriptions received amounted to $1,725 million, representing an over subscription by 72 percent.

Untu Capital, which was established in 2009, posted $2,6 million operating income last year compared to $2,4 million in 2015.

The company increased its profit by 92,1 percent to $436 697 during the same period under review compared to  $227 313 the previous year.

Its total assets in 2016 improved to $4,5 million from $4,2 million  in 2015.

The microfinance institution is also the first company to unveil the first mobile-based retail note in Zimbabwe after receiving  regulatory approval  from the Securities  and Exchange Commission of Zimbabwe (Secz).

Untu became the first to implement mobile trading of securities in the southern Africa region.

The mobile platform has been successful in Kenya, where it led to participation of more indigenous investors to participate in capital markets, due to affordability and efficiency.

This enables investors to trade using their mobile devices and mobile money wallets, with a minimum investment amount of $50.

Mobile platform is crucial in attracting the mass market and demystifying capital markets as elitist. It opens up the capital markets to broader participation. — The Financial Gazette

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