Zimbabwe Stock Market Regulator Balks at Plan to Force Bank IPOs

Zimbabwe’s stock exchange regulator said a planned law to force banks to sell their shares on the local bourse will only work once the nation has addressed issues holding back equity valuations.

“Forcing companies to list, in my view, I don’t think is the best,” Tafadzwa Chinamo, chief executive officer of the Securities Exchange Commission of Zimbabwe, said in an interview today in Lusaka, the capital of neighboring Zambia. “If they’re forced to go to the market now, they will feel like they’re selling their assets for close to nothing.”

Legislation requiring banks operating in the southern African nation to float shares on the Zimbabwe Stock Exchange within two years may come into effect on May 24, the state-controlled Herald newspaper reported today, citing Finance Minister Tendai Biti. The law will help banks raise capital, the Harare-based newspaper cited Biti as saying.

Once the government and the bourse have addressed factors affecting low valuations of listed companies, banks will consider listing as “a no-brainer,” Chinamo said. These include holding national elections, introducing centralized script handling and automating share trading, said Chinamo, adding that he expects all of this to happen this year.

Zimbabwe, which holds the second-biggest chrome and platinum reserves after South Africa, plans to force banks to sell or cede 51 percent of their operations to black Zimbabweans or the government. Companies including Barclays Plc, Standard Chartered Plc, South Africa’s Standard Bank Group Ltd. and Nedbank Group Ltd. have operations in the country.

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