Stock exchange home closed

HARARE - Municipal authorities on Tuesday shutdown a building housing the
Zimbabwean Stock Exchange (ZSE), living brokers and investors unsure whether
the bourse will open for business today.

The ZSE conducts one call over session every weekday in the morning on the
floor of the exchange.

But it was uncertain whether there will be any trading today after Harare
City Council officials shut down 101 Union Building, which houses the ZSE,
saying tenants at the building have not paid water bills.

There are several tenants at the building in Harare's central business
district and it was not clear whether the ZSE was among those failing to pay
water bills estimated at US$7 000.

A ZSE official told ZimOnline that the bourse could temporarily relocate to
another building to allow trade to continue and avoid inconveniencing
brokers.

"We are likely to move trading to another building," said the official, who
did not want to be named because he did not have permission to discuss the
matter with the Press.

ZSE chief executive Emmanuel Munyukwi could not be reached for a comment on
the matter last night.

Failure to trade would be a morale sapping blow to a ZSE that has seen trade
shrink 19 percent since December last year, while market capitalisation
dropped to US$3.19 billion in June from nearly $4 billion at the beginning
of the year, according to figures released by the Reserve Bank of Zimbabwe
recently.

The drop in trade figures is chiefly blamed on foreign investors fleeing the
bourse, scared by a controversial government scheme to compel foreign-owned
businesses to sell stake to local blacks.

Under the programme all foreign- owned firms valued at US$500, 000 or more
will be required to transfer significant stake to locals by 2015.

President Robert Mugabe and his ZANU PF party, who enacted the law in 2008
before forming a power-sharing government with Prime Minister Morgan
Tsvangirai's MDC, had initially wanted foreigners to cede 51 percent
shareholding to blacks.

They backed own after stiff opposition from Tsvangirai and agreed to set
varying percentages of shareholding foreign-owned companies in various
sectors of the economy must transfer to locals.

Analysts say the empowerment programme is a huge disincentive to potential
foreign investors who will question the wisdom of pouring money into an
economy where the government can intervene to force them to cede stake to
locals. - ZimOnline.