Half of the Zimbabwe Stock Exchange firms could be delisted under new rules

Half of actively listed companies on the Zimbabwe Stock Exchange (ZSE) could be forced to delist or downgrade to a secondary bourse if they fail to meet a proposed listing threshold of $10 million if new listing requirements are signed into law.

ZSE chief executive Alban Chirume said the equities market will have a two tier system that could result in some listed companies requiring fresh capital or exit the main bourse.

He said once the new listing requirements are gazetted, listed companies will be given a grace period to comply before they can decide to delist or migrate to an alternative market.

The ZSE has proposed to set $250 000 as the minimum share capital for companies intending to list on the planned secondary exchange, an alternative bourse to be known as the Zimbabwe Emerging Enterprising Market (ZEEM).

“What we have done in terms of the listing requirements is now to provide bands on what would be on our main board. Our main board should eventually be $10 million and above and the small to medium enterprises we are working on is from $250 000 to just under $10 million,” Chirume said.

“Listing is a voluntary process. We don’t go out and force companies to list. But when we see that companies are not supposed to be on the main board, they will eventually come off because of the new rules we are putting. When we do major changes in terms of rules, we give institutions or players time to say you need to go to this level.”

Latest statistics obtained from the ZSE show that 29 out of 59 listed firms have a market capitalization below $10 million.

As of Monday, financial institution NMB was slightly short of the threshold at $9.9 million, insurer Fidelity $9.8 million while engineering firm Zeco has the lowest market capitalisation at $46 000.

Beverage maker Delta, a unit of SABMiller is the most capitalized counter at $1.2 billion.-The Source

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