Secondary stock exchange for Bulawayo

PLANS of opening a secondary stock market exchange which will likely to be located in Bulawayo are at an advanced stage, an official said.

In an interview with Sunday News Business on the sidelines of Zimbabwe Stock Exchange (ZSE) Initial Public Offering (IPO) Master Class workshop, ZSE chief executive officer Mr Justin Bgoni said plans to open a secondary bourse is work in progress with its implementation likely to be next year.

There have been growing calls from captains of industry and economists over the past few years for the country to come up with a secondary bourse for Small to Medium Enterprises (SMEs) taking into cognisance the sector's growth over the last two decades.

"When talk about the stock exchange for small companies was raised there was an initial thought of putting it here in Bulawayo but I am of a different view. I am thinking of a derivatives market," said Mr Bgoni.

He said Bulawayo was strategically positioned to play host to the derivatives market owing to the presence of the National University of Science and Technology (Nust).

"I'm very keen in having it (secondary stock exchange) here in Bulawayo because of Nust. Nust is a very good university in terms of finance and you get more experts here thus it makes more sense to have it here in Bulawayo. So definitely either its small companies or the derivatives (stock exchange) it has to be here in Bulawayo," said Mr Bgoni.

He said in spite of suffering over two decades of de-industrialisation Bulawayo still has a number of companies with potential to list on the stock exchange particularly making reference to mentioned Bulawayo Municipal Commercial Undertaking's beverages manufacturing unit, Ingwebu Breweries.

"I have always thought that Bulawayo does beat itself down here because they are some good companies that can do more things. I would take a specific example for instance, Ingwebu. It has had a lot of problems but it's popular. It's a good brew and they can expand it across the country and compete against big companies," said Mr Bgoni.

Ingwebu has for close to a decade been making losses of up to $2 million but since last year the company has managed to turn around its fortunes.

"I think it's a matter of Bulawayo believing in itself. Bulawayo City Council is known as one of the best run councils in the country and if they wanted to raise money on the market through bonds they can simply talk to people (investors) and they will be very willing to listen to them," said Mr Bgoni.

He said Bulawayo-based personal care and value added agro-products manufacturer, United Refineries Limited has indicated its intention to list on the stock exchange.

"United Refineries have indicated that they want to come on the market, so at the moment they are going through their processes and we are hopeful that they want to come into the market. They have agreed that I can tell people that they want to come onto the market and we are very excited about that," said Mr Bgoni.

He said the performance of listed companies has over the past few years been satisfactory with the stock exchange remaining the most reliable vehicle to safeguard one's investment.