Zimbabwe will halve its stake in the local bourse as part of a plan to float the company and attract more foreign capital into the country, the finance minister said on Monday.
The government will cut its stake in the Zimbabwe Stock Exchange (ZSE) to 16%, down from its current holding of 32%, as part of a long-term plan for a public listing, Patrick Chinamasa said.
“The primary objective of the project is to transform the ZSE from a statutory body into a viable public limited company,” he said after signing the agreement.
Stockbrokers are also expected to reduce their stake in the stock exchange to 34% from 68% to “pave the way for the listing of the stock exchange,” Chinamasa added.
The remaining 50% ownership will be sold to private investors to raise $3 million (2.2 million euros).
Listing ZSE is aimed at helping it to attract foreign investors at a time when Zimbabwe is experiencing a liquidity crunch and massive unemployment.
Chairperson Eve Gahadzikwa said increasing the investor base of the exchange would encourage more companies to list in Zimbabwe, attracting much-needed capital to the country.
Many investors have been scared off by Harare’s controversial indigenisation law, which means foreign companies cannot own a controlling stake in any domestic businesses.
The ZSE has 67 companies on its board and reported a total income of $1.9 million in 2013, according to its financial statements.