Zimbabwe Stock Exchange Plans IPO as Index Rallies 38%

Zimbabwe’s stock exchange, whose main industrial index has jumped 38 percent this year, plans to sell shares through an initial public offering by the end of 2013, according to the country’s Securities Exchange Commission.

The market value of shares listed on the bourse may nearly double to $10 billion from the current $5.4 billion over the next 12 months as it plans to start automated trading to attract more investors, Chief Executive Officer Tafadzwa Chinamo said in an interview in Lusaka, the capital of neighboring Zambia, where he spoke at a capital markets conference. An IPO might value the ZSE at $15 million to $20 million, he said.

Zimbabwe’s plans come as African bourses record some of the highest growth rates in the world this year. The Ghana Stock Exchange, which began automated trading in 2009, has seen its composite index rally a global-best 47 percent. Nigerian and Kenyan markets are among the top 10 best performers, according to data compiled by Bloomberg.

The ZSE has appointed Imara Holdings Ltd., the Botswana-listed investment bank, and Harare-based Corporate Excellence as financial advisers for its planned share sale, Chinamo said. The move is different from a demutualization, which is commonly done by securities exchanges, because the Zimbabwean government claimed ownership of the bourse since it was established in its current form in 1974, he said.

Along with automation, which will see trading done electronically rather than by hand, holding elections will boost confidence among investors, Chinamo said. The southern African nation is due to hold votes this year, ending a five-year power-sharing agreement between Prime Minister Morgan Tsvangirai’s Movement for Democratic Change party and President Robert Mugabe’s Zimbabwe African National Union-Patriotic Front.

The ZSE Industrials Index, which includes all listed companies apart from four mining stocks, fell for the first time in six days, retreating 0.2 percent to 209.92 by 2:37 p.m. in Harare, Zimbabwe’s capital.

To contact the reporter on this story: Matthew Hill in Lusaka at mhill58@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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