Zimbabwean government, private sector ready for UK capital markets indaba

ZIMBABWEAN government officials and corporate leaders are gearing for a major capital markets conference in London, United Kingdom, during the last week of next month to mobilise private capital to finance domestic development.
The event, set for 20-21 April, will be held at Queen Elizabeth II Centre, a conference facility located in the City of Westminster, London, close to the Houses of Parliament, Westminster Abbey, Central Hall Westminster and Parliament Square.

It will be addressed by Finance minister Mthuli Ncube and key players in the primary capital markets, corporate leaders, financial institutions and investment banks executives, and public accounting firms heads, as well as secondary market players such as fund managers and stockbrokers from Zimbabwe and overseas.

Bard Santner Markets chief executive Senziwani Sikhosana says the company had turned to gold as it is a defensive asset and can withstand market and exchange volatility prevalent at the material time. The asset management firm, recently launched a gold coin unit trust in Harare. Picture by Freedom Mashava

The conference is organised and partly funded by Financial Markets Indaba and Bard Santner Markets Inc, among other players. It is facilitated by the Zimbabwean embassy in the UK led by ambassador Christian Katsande.

Bard Santner Markets Inc is the headline sponsor of the conference whose theme is The role capital markets for sustainable growth of the economy: Creating and developing efficient local capital markets.

The aim of the event is to showcase the local capital market to international investors, including the diaspora investing community to mobilise capital.
Bard Santner, a fast-growing local financial advisory and investment firm, says the conference has been well-subscribed, surpassing their initial expectations.

“We are very encouraged by the level of buy-in and delighted that the Ministry of Finance, Reserve Bank of Zimbabwe, Securities and Exchange Commission of Zimbabwe and, of course, the Victoria Falls Stock Exchange, along with some of its listed companies, have confirmed attendance,” Bard Santner chief executive Senziwani Sikhosana said.

“In our view, it is this seamless and almost natural private-public partnerships that are imperative in ensuring that the Victoria Falls International Financial Services Centre project takes off. Since Victoria Falls has been designated a Special Economic Zone, that will help to develop the spectacular town into a regional financial hub handling flows of finance, financial products and services across borders. It will signify Zimbabwe’s recovery and rise to what it ought to be: a regional and African economic powerhouse. It’s doable.

“We even have companies listed in other capital markets such as in West Africa and North America participating. That on its own speaks volumes about this. Diaspora individuals and organisations are also participating, alongside premier investment management firms in London.”
Bard Santner, which recently launched a Gold Coin Unit Trust, is slowly, but surely making itself a force to reckon with in participating in key economic events.

For instance, during last year’s Capital Markets Awards held in November facilitated by Financial Markets Indaba and Business Weekly, Bard Santner sponsored the Best Preforming Listed Company and the Life Time Award.

It was also co-sponsored the 2022 ZimTrade Conference in Harare with the pan-African bank Ecobank. At the ZimTrade conference, Bard Santner chairman Vinod Bussawah, based in Mauritius, currently the leading financial services centre in the region, expressed confidence in Zimbabwe’s plan to launch its own financial hub in Victoria Falls.

Bussawah said when Mauritius started, many said it won’t work, but now it has become a phenomenal success. With the right model, strategy and policies, Zimbabwe can do it.

Besides Bard Santner, Financial Markets Indaba, an investment platform which connects capital providers, allocators and operators with a view to promote investment deals and activity in Zimbabwe and Africa, is also playing a key role at the conference.

The platform convenes insightful panel discussions, presentations and conversations in the three most important cities to Zimbabwe’s capital markets: Harare, Johannesburg and London.

The Zimbabwe Stock Exchange (ZSE) is the backbone of Zimbabwe’s capital market, with a history dating back as far as 1896. It is one of the oldest and highly diversified bourses in Africa with listings spanning across key sectors of the economy.
The ZSE automated its trading system in July 2015, bringing the manual trading system to an end.

However, the Automated Trading System still remains limited to the stockbrokers in terms of both trading and real-time viewing rights.
Zimbabwe needs a functional capital market to help innovators with great ideas to become entrepreneurs and small businesses to grow into big companies as what happened in the 1990s with Econet Wireless Zimbabwe and Innscor Africa Limited, according to Dr Alfred Mthimkhulu, Bard Santner Investors executive director.

Reiterating remarks he first made at the Confederation of Zimbabwe Industries congress in Harare last year, Mthimkhulu said when the primary market was working, together with a vibrant secondary market during the 1990s, that helped companies to raise long-term funding for investment.
“We need to revive the primary market function of the capital market to raise long-term funding to finance long-term projects. The capital market is a measure of inherent strength of the economy. It is one of the best sources of finance for companies, and offers a spectrum of funding avenues to investors which, in turn, encourages capital creation in the economy,” Mthimkhulu said. “The secondary market is basically the stock market driven by trading.”

The World Bank Group views local capital markets as critical to accelerating the sustainable economic growth needed to broaden prosperity and reduce poverty. Deeper, dynamic and more efficient equity and debt markets can be more effective in helping to mobilise domestic savings and complementing traditional bank lending by fostering risk-taking and long-term investments.

Further, capital markets can protect economies from volatile fluctuations in capital flows and reduce the dependency on foreign debt. They also promote efficient governance and transparency, while providing diversified sources of investment.

For Zimbabwe to stimulate economic growth and development, it requires long-term funding, hence capital market provides an avenue for mobilisation and utilisation of long-term funds for development. This is referred to as the long-term end of the financial system.

So the capital market, as an organised market mechanism for effective and efficient transfer of money capital or financial resources from the investing class to the entrepreneur class in the private and public sectors of the economy, is what the country needs to ensure economic recovery and growth.
According to the World Bank, capital markets can accelerate economic growth by providing a boost to domestic savings and increasing the quantity and quality of investment.