Boost for agric sector
RYAN CHIGOCHE
Lands, Agriculture, Fisheries, Water, Climate and Rural Development deputy minister Davis Marapira says the listing of the Cass Saddle Agriculture Exchange Traded Fund (ETF) on the Zimbabwe Stock Exchange (ZSE) will promote agriculture as a business.
The Cass Saddle ETF, which has become the fifth listing on the ZSE after the Old Mutual Top 10 ETF, Morgan & Co’s Multi-sector staples ETF and its Made in Zimbabwe ETF, and the CBZ’s Datvest ETF, will track counter in the agricultural sector listed on the ZSE.
These include National Foods, Tanganda, BAT, Hippo Valley, Seed Co, TSL, Dairibord and Zimplow.
The Cass Saddle ETF took off last week with the seed capital of ZWL$36 199 404.
Marapira said such innovations as the Cass Saddle Agriculture ETF are instrumental for improving access to capital for investment into the various value chains in the agriculture sector.
“The creation and listing of this ETF represents the marriage between Agriculture and Financial markets which is a very important step towards promoting agriculture as a business in line with the Agriculture and Food Systems Transformation Strategy,” Marapira said.
He said listing is important as it enhances transparency, corporate governance and improved credit worthiness .
“This is the solution for channelling institutional funds into agriculture. As the National Development Strategy 1 seeks to facilitate appropriate funding for agriculture, the capital markets also play a pivotal role towards home grown equity based financing solutions for agriculture,” Marapira said.
The ZSE chair Caroline Sandura hailed Cass Saddle Asset Management team for choosing picking “this important sector for their ETF”.
“The agriculture sector is well documented as the pillar of the Zimbabwean economy contributing an average of 10% to the gross domestic product over the last five years and slightly over US$1bn in export receipts in 2021.
“The agriculture sector also supplies 60% of the raw materials required by the industry,” Sandura said.
ETFs are passively managed securities which track the performance of a specified security which include but are not limited to indices, commodities, currencies or any other asset.
The funds are open ended and they are fully funded.
They come with a number of benefits including portfolio diversification, liquidity and relatively lower management fees.
Early this year, ZSE introduced the ZSE ETF Index to measure the performance of ZSE listed ETFs. The index was back tested to January 2022 and gained 157% since then. In Q2 2022 the ZSE ETF Index gained 13% to settle at 256.86 points, the bourse said in a Q2 newsletter.
