Published: 16 June 2014

Finance and Economic Development Minister Patrick Chinamasa says poor corporate disclosures and failure by companies to embrace international best practices has made the Zimbabwe Stock Exchange (ZSE) less attractive as investors prefer regional bourses.

In a speech read on his behalf at the Securities and Exchange Commission of Zimbabwe shareholders and investors' forum last Friday, Minister Chinamasa said inherent issues that have been affecting the country's potential to attract investment also include poor corporate governance, lack of shareholder activism and unethical business practices.

"These issues have continued to make our markets less attractive, resulting in investors turning to markets such as Johannesburg, Mauritius, Nairobi and Nigeria where corporate disclosure and governance practices are considered to be excellent," he said.

Minister Chinamasa said despite many factors that hold back investors, the ministry will strive to address issues surrounding technology, access to information, data availability and harmonisation of rules.

"As part of efforts to make capital markets more attractive, Government has been reviewing the regulative legislation as well as synchronising policies in order to ensure clarity and consistency.

"You might be aware that demutualisation and automation of the ZSE are now at an advanced stage and these are efforts by Government to create an enabling environment through provision of financial infrastructure," he said.

Minister Chinamasa said a harmonised regional securities market environment will help deepen regional financial integration, improve capital mobility and attract both regional and international investors.

He said Government appreciates the importance of an efficient and effective capital market in raising investor confidence and attract investment.

Minister Chinamasa said the forum presents an opportunity to define investment values in Zimbabwe through shareholder activism in our capital markets and companies.

"This therefore, is important in complimenting Government effort to rebuild a sustainable economy."
Institute for Sustainability Africa (INSAF) CE Rodney Ndamba said shareholder activism is vital to instil confidence in the capital market.

He said companies should be accountable to their operations hence should balance today's profits with tomorrows sustainability.
- The Herald

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