ZSE mulls mineral derivatives

LIVINGSTONE MARUFU

“Our actions may be impeded, but there can be no impeding our intentions or dispositions because we can accommodate and adapt.

The mind adapts and converts to its own purposes the obstacle to our acting. The impediment to action advances action. What stands in the way becomes the way,” Marcus Aurelius once said.

The statements inspired the Zimbabwe Stock Exchange chief executive officer, Justin Bgoni ,  who said the local bourse is planning to launch mineral  derivatives.

The executive, who once served at the New Zealand Stock Exchange  said : “In New Zealand, the country is big on milk exports and hence they launched milk derivatives. We have mineral exports and we want to start mineral derivatives,” Bgoni said.

Currently, the ZSE remains the most performing bourse in the region; its year to date US$ returns grew to 138.8% from 92.2%.

Unlike in the past   during the inflationary environment where investors preferred property, this time the ZSE has become the preserver of value and a hedge against inflation.

Bgoni told Business Times that the bourse, whose market cap breached  the trillion dollar mark in October, is the go-to- destination due to a number of vehicle investment instruments.

“The exchange still remains a viable option as the best preserver of value both against inflation and exchange rate losses.

“With the good rains we received earlier this year, led to a great agriculture season and better returns on ZSE.  Throughout the year, we witnessed the decline in inflation and the Zimbabwe Dollar remained stable resulting in significant growth in the participation of investors on the bourse,” Bgoni said.

The executive said given the momentum brought about by the agriculture sector, the bourse will work with various stakeholders such as the Finance and Economic Development ministry, market players and policymakers to improve the economy.

Bgoni said the bourse is facing the challenges that other organisations and everyone are facing in Zimbabwe.

“The country’s economy is being restructured and especially currency. An Exchange to be successful requires new listings and capital raisings. This has not worked well on ZSE where we have struggled with capital raising because of unstable currency. This is the main reason why the Victoria Falls Stock Exchange (VFEX) is denominated in hard currency to encourage new listings in Zimbabwe,” Bgoni said.

The VFEX turned one year old in October and has struggled to hit the ground running.

Bgoni said since the launch of VFEX, the hard currency bourse has witnessed two listings from SeedCo International and Padenga Holdings, with the Caledonia set to list before the end of the year.

The executive hopes that VFEX will have up to three more listings by year-end but most counters remain pessimistic.

“At this moment we are unable to share the companies that are set to join VFEX. However, stakeholders will be informed as the prospective issuers will issue a pre-listing statement which will also include the timelines for listing,” Bgoni said.

VFEX came on board last year and PPC and Old Mutual were supposed to join the bourse but the issue remains unresolved.

“PPC and Old Mutual are discussing privately with the Government on the matter. In the background, we are trying to do our best for the parties to reach an agreement.

“Since these discussions are being done privately, we are unable to provide timelines but we hope that they will be resolved in the shortest possible time,” he said.

Bgoni has been the ZSE chief executive officer for two-and-half years and he is committed to three things which are getting the fundamentals right, improving ZSE relations with stakeholders (both internal and external) and growing the exchange.

“I am happy that over the past two years we have managed to restructure the organisation to a competitive exchange and we now enjoy cordial relations with our regulators, the government and other key stakeholders.

“We have managed to launch a number of new initiatives over the past two years, a training institute (ZSE Training Institute), an online trading application (ZSE Direct), a new USD trading exchange, the Victoria Falls Stock Exchange, and our own depository,” Bgoni said.

He said in terms of new products, ZSE has also managed to have a home-grown Exchange Traded Fund listed on the exchange in the midst of the Covid-19 pandemic and the bourse also grew Information and communications technology ICT competencies.

Bgoni  has also worked with the New Zealand Stock Exchange  and said there  are some initiatives  that can be  applied on  ZSE as they are two different exchanges.

On the New Zealand Stock Exchange one does not wait for listings, one actively seeks them hence the work and listing master classes and visiting potential listings exercises are very common there.

The other takeaway from the New Zealand bourse is that exchange creates financial products based on the economy.

The third lesson is creating new markets hence ZSE is creating the same such as invoice discounting exchange.

The ZSE continues striving towards putting effort into running a professional world-class market.

Bgoni has also worked for  Rasai Holdings and Mckinsey and Co and has  helped him  to gain an appreciation of the diverse industries and roles in various countries such as Zimbabwe, South Africa, and New Zealand.

He said the experiences there have allowed him to apply his learnings to situations he faces in Zimbabwe.

The ZSE chief said he is more of a generalist which is important in his role as the CEO.

Bgoni said he had not given a thought on retiring at the moment as he remained focused on executing his duties at ZSE.

In case he leaves the bourse, Bgoni hopes to be involved in a capacity that helps in the economic development of Zimbabwe in particular and Africa in general.

Currently, Bgoni only sits on the Investor Protection Fund board which arose from his position at ZSE so as to minimise conflict.

ZSE has faced challenges in operationalising the central securities depository as the Competition and Tariff Commission is insisting that it has not agreed with you on new incentives which entail a rebate on the statutory CSD levy to be collected by ZSE on all trades settled through the depository.

He said there is a way that ZSE can do this and not fall foul of CTC and said ZSE is in discussions with CTC on the matter.

ZSE said it is very comfortable about the resolution.

“People have a right to seek relief from the court, as it is their democratic right. We are comfortable with our argument on doing what we did,” Bgoni said.

Bgoni is a finance professional who is passionate about the development of Zimbabwe and a firm believer that only Zimbabweans will resolve the current problems and he tries to use the little talent he has to make the country better.

His general philosophy is to do things that have meaning in my life.

Bgoni said he is a follower of Stoicism philosophy and it has some principles that he likes including understanding what one has control over, remembering that a person will die one day, and understanding the value of time.

He said the economic development of Zimbabwe in particular and Africa, in general, is dear to his heart.

The bourse chief likes reading and has read Jannie Mouton: And then they fired me.

“It is a great book on overcoming adversity, the building of brands, and more importantly on how entrepreneurs can utilise the capital markets to create wealth.

“I have also been reading the Autobiography of a Yogi by Yogananda Paramahansa. This has been helpful in terms of understanding the power of meditation, one of the things I am trying to understand and implement in my life,” Bgoni said.

Bgoni also draws inspiration from the late Apple founder and the chief executive officer Steve Jobs when he said “We’re here to put a dent in the universe. Otherwise, why else even be here?”

“I shall be telling this with a sigh. Somewhere ages and ages hence two roads diverged in a wood, and I.”

Bgoni likes to exercise at home or the gym and also likes watching sports, especially basketball.