Markets

First ETF lists on Zimbabwe Stock Exchange

PHILLIMON MHLANGA

The Old Mutual Zimbabwe’s Top 10 Exchange Traded Fund (ETF), will be listed on the Zimbabwe Stock Exchange (ZSE)’s main board today.

Trading of the ETFs, launched last month, is expected to improve liquidity,diversify the current investment offerings at the local bourse  which had been comprised of local equities only.

This means Zimbabwe has joined other four bourses in Africa -South Africa, Nigeria, Kenya and Egypt- to trade the instrument.

According to Old Mutual group chief executive officer (CEO), Sam Matsekete, the financial services provider, will put initial seed capital in form of scrip in the exact weights of the top 10 index.

The fund will then be listed on the ZSE  today by way of introduction.And additional investments from other investors will be used to buy shares on the market and add to the portfolio.

ZSE CEO, Justin Bgoni said: “The ZSE is pleased to advise that the Old Mutual ZSE Top 10 ETF launched on December 1, 2020 will be listed on the ZSE main board from January 4, 2021. Investors wishing to invest the security are advised to  consult their stockbrokers or financial advisor.”

The ETFs will track the ZSE Top 10 counters, which  will be defined from time to time  by the ZSE, which reviews  the counters once a quarter.

The ZSE, Top 10 counters at the end of the quarter to September 30,2020, were CBZ Holdings, Delta Corporation, Cassava Smartech Zimbabwe, Innscor Africa, FBC Holdings, Econet Wireless Zimbabwe, Padenga Holdings, Rainbow Tourism Group, OK Zimbabwe and SeedCo Limited. 

This means investors will be offered an opportunity to own 10 underlying stocks through one investment in the ETF.

Investors who wish to invest in the fund can do so through two ways, by buying units in the ETF through any registered stockbroker or alternatively investing in kind by delivering  a basket of stocks in the exact weights of the fund through an authorized participant.

The fund manager,Old Mutual Investment Group Zimbabwe, will be responsible for periodically replicating the ZSE Top 10 index in line with the index ground rules.

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