According to news reports, the Board of the Zimbabwe Stock Exchange is close to negotiating an exit package with CEO Emmanuel Munyukwi, who was suspended in May. Board chairperson Eve Gadzikwa was reported by The Independent’s businessdigest that the board was in the process of concluding negotiations and an announcement is due in the coming week. ZSE operations executive Martin Matanda is acting chief executive.
Munyukwi has been CEO since 2001 but has been a key manager of the ZSE before that and was a valued colleague when this correspondent was running the Namibian Stock Exchange before 2000. The businessdigest suggests that although Munyukwi had been suspended on charges of alleged incompetence, currently the Board was negotiating an exit package with him and a figure of US$1 million was mentioned. Tony Barfoot, the previous CEO of the ZSE, was reportedly removed as consultant in April 2012, according to a report in Newsday.
There is no news on who will be the new head of the ZSE. It is possible that a potential candidate will be sought among Zimbabweans with experience of working in an automated and advanced securities exchange.
The Securities and Exchange Commission of Zimbabwe is reportedly working with the ZSE, introducing a central securities depository and electronic trading, with plans to automate the ZSE by March 2013, according to the news reports. One report says that SECZ has contracted a private company to develop a framework for establishing an electronic securities trading platform. State-owned ZB Financial Holdings has 13% of the CSD, National Social Security Authority 13% and Infrastructure Development Bank of Zimbabwe 10%, according to a shareholding agreement. The Expression of Interest tender for the CSD was published in 2010.
SECZ is also working with the ZSE on demutualization, although the ZSE is a private company more structural transformation may be possible. The tender for the advisory work on “ZSE Privatization” had a closing date of either March or September 2012, but the bidder was supposed to find their own funding for the work.
The Securities Act was amended in August 2012 to make SECZ more effective, extend its powers and give more protection to investors. This requires all securities exchanges in Zimbabwe to be companies, not mutual associations or other corporate bodies. There is a single Investor Protection Fund and the SECZ takes over regulation of asset managers and managers of collective investment schemes from the Reserve Bank of Zimbabwe. The CEO of the SECZ is Tafadzwa Chinamo.
Listings Executive Lina Mushanguri also told businessdigest that the ZSE is drafting a framework to set up a board for small and medium enterprises as part of the ZSE, which she said they would call it the “SMEs Stock Exchange”. This will have adjusted rules and regulations. The newspaper reports that income for the ZSE “last year” was $1.6m and expenses were $1.0 million, giving a surplus of $612,947. The ZSE website has been inoperative for many months and the ZSE annual report is not available online.
By 2 November the ZSE market capitalization had climbed back to $4 billion, after being below this for more than a year. It reached a high of nearly $4.3 billion in May-June 2011. Foreign investors contributed 80% of turnover in October, according to a report in the Standard newspaper.