HARARE -- The Zimbabwe Stock Exchange (ZSE) has rallied on the back of positive news that the government was considering adjusting some provisions of its controversial empowerment regulations, Kingdom Stock Brokers has said.Kingdom said the visit by South Africa President Jacob Zuma, who announced that the countrys three political players had agreed to a package of measures to deal with a power-sharing dispute holding back the unity government, had also helped set the ZSE on the rebound.
According to Kingdom, the ZSE last week posted its finest rally for the year to date which saw the industrial index gaining by 8.97 percent, while the mining index gained 5.44 percent.
The Zimbabwe Stock Exchange was on the rebound this week on the back of unconfirmed developments on the political front following the visit by President Zuma, the SADC appointed mediator, last week, Kingdom said in its report for the past week.
There has however been speculation on what transpired during President Zumas deliberations with the principals and other stakeholders concerning outstanding issues and it is on the back of such developments that the equities market found its rhythm again.
Zuma had a three-day working visit to Zimbabwe earlier this month and met with President Robert Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara to try to nudge the Zimbabwean leaders to complete implementation of their power-sharing agreement.
However statements by Mugabe last weekend that he had not agreed any package of measures with his former opposition foes could again hit trading at the ZSE this week.
Trading on the ZSE had been weak since the beginning of March following announcement by Indigenisastion Minister Saviour Kasukuwere of the empowerment regulations compelling foreign-owned firms to cede controlling stake to indigenous Zimbabweans over the next five years.
Kingdom said the bourse was showing signs of recovering from Kasukuweres shock announcement following reports that government will set up inter-ministerial sub committees for possible adjustments of some provisions of the indigensation and
economic empowerment regulations.
He (Kasukuwere) also said negotiations between his ministry and the ZSE were underway concerning the listed companies but said the regulations must apply with equal force to all listed companies, the stock broking firm said.
The indigenisation law affects companies with more than $500,000 of assets, including Anglo Platinum Ltd, Impala Platinum Holdings Ltd and Aquarius Platinum Ltd — three of the worlds four-biggest producers of the metal that own mines in Zimbabwe.
British-owned Standard Chartered Bank and Barclays Bank as well as Africas biggest insurer Old Mutual Plc are also among big names that are going to be affected by the empowerment regulations.
The regulations that are championed by Mugabes Zanu (PF) party requires foreign-owned firms operating in Zimbabwe to transfer majority stake to local blacks within five years.
But the regulations do not provide a clear formula for the transfer of shares
to black Zimbabweans and are also silent about where impoverished locals will get the money to finance the company takeovers.
Critics say Mugabe wants to press ahead with transferring majority ownership of foreign-owned companies as part of a drive to reward party loyalists with thriving businesses.
Investment analysts say the empowerment programme could see Zimbabwe being shunned by investors again who fear a repeat of the land seizures, at a time the new government is out to attract foreign investors to help grow an economy that was in decline for the last ten years.
Post published in: Opinions