Securities laws revamped to lure investment
ZIMBABWE is in the process of tweaking its Securities and Exchange Commission (SECZ) laws to align them with international best practice. This initiative is part of efforts to attract more investment in the country's capital markets, according to a senior government official.
The update is also expected to promote investor confidence and offset the adverse impacts of foreign capital flight from the country's capital markets, said Professor Mthuli Ncube, the Minister of Finance, Economic Development and Investment Promotion.
"In order to align with international best practices, enhance investor protection, promote market integrity, and build investor confidence through ensuring fair, efficient, and transparent markets, the Securities and Exchange Commission (SECZ) legislation is being revisited," Professor Ncube told delegates at the Zimbabwe Capital Market Conference in Shanghai, China, last week, which was organized by the Financial Markets Indaba (FMI).
Professor Ncube further explained that the revision of the legislation aims to achieve several goals: aligning with the dynamic changes in technology, providing for the development of new financial products, and ensuring adherence to international and regional standards such as those set by the International Organization of Securities Commissions (IOSCO).
The FMI, in partnership with the Victoria Falls Stock Exchange (VFEX), co-hosted the conference last week in Beijing and Shanghai. They also collaborated with the Ministry of Finance, Economic Development and Investment Promotion to foster partnerships between the Zimbabwe business delegation and the Chinese investment community, as well as to present the Chinese investment community with compelling investment opportunities. The conference paid special attention to the VFEX.
The initiatives to attract investment into the country's capital market come on the back of the important role capital markets play in facilitating economic growth in the country.
"The government recognizes the role of capital markets towards achieving the national Vision 2030 and the NDS1 national priority areas," said Professor Ncube. "Capital markets facilitate long-term capital raising for the productive sectors of the economy, improve financial inclusion, mobilize resources for infrastructure development, and inflation hedging, among others."
During the conference, Professor Ncube also highlighted the government's efforts towards raising awareness and international re-engagement, developing investor-centric products and services, and creating an enabling operating environment. These efforts are expected to help boost investor confidence and see an improvement in foreign direct investment (FDI).
"Ladies and gentlemen, Zimbabwe is open for business, and so is the capital market," Professor Ncube declared. "The market welcomes all investors, issuers, and market intermediaries, foreign and domestic, including Zimbabweans in the Diaspora."
Currently, Chinese investment on the country's capital markets is limited, with the bulk of foreign investors made up of US and European investors. The program in China aimed to boost Chinese participation, especially on the VFEX, which trades in US dollars, in addition to offering a host of incentives for both investors and issuers.