Zim gets first Exchange Traded Fund
Old Mutual Zimbabwe has announced the establishment of the country’s first-ever Exchange Traded Fund, which is set to be listed on the Zimbabwe Stock Exchange on the 4th of January 2021.
The ETF, will track the ZSE Top Ten Index.
According to a statement released by the company yesterday, the ZSE Top Ten Index consists of the top 10 counters by market capitalisation.
“Old Mutual Investment Group Zimbabwe (Private) Limited, the ETF fund manager, will be responsible for periodically replicating the ZSE Top Ten index in line with the index Ground Rules as defined by the ZSE. The reference Top Ten index will be reviewed once a quarter.”
Old Mutual said it will put initial seed capital on the day of listing but did not mention the actual amount.
“Additional investments from other investors will be used to buy shares on the market and add to the portfolio,” the financial services giant said.
The ETF, which will be listed by way of introduction, is one of Zimbabwe’s initiative to broaden its capital markets.
Zimbabwe, which recently launched a second stock exchange in the resort town of Victoria Falls, is also working on introducing Real Estate Investment Trust (REITs) as promulgated in 2019.
In recognition of the capabilities of REITs to mobilise resources for new infrastructure projects and also incentivise investors into this alternative high yielding financial instrument, Finance and Economic Development Minister Mthuli Ncube, in his 2021 National Budget, proposed to exempt income accruing to REITs from corporate income tax.
There are also plans to establish a commodities exchange that is meant to address the agriculture marketing problems, which undermine market access and financial viability of farmers.
A pilot project for the commodities exchange is underway and is expected to be officially launched in March 2021.
According to Minister Ncube, the exchange, to be supported by the Warehousing Receipt System (WRS), in particular, offers organised marketing where future delivery contracts for graded commodities such as grains, cotton, sugar and coffee are bought and sold.
Business Weekly Webinar: Does taxing the informal sector impede or support economic growth?
Business Writer
Your favourite paper, Business Weekly, will today host a discussion on the impact of taxation on the informal sector.
The discussion centres on the question: Does taxing the informal sector impede or support economic growth?
The discussion comes as Government plans to introduce new taxes targeted at micro and small enterprises as well as informal operators.
In his 2021 Budget presentation, Finance and Economic Development Minister Mthuli Ncube proposed to introduce a presumptive tax of an equivalent of US$30 per unit per month on businesses that operate from designated business premises where the landlords are either Local Authorities or private property owners such as the Gulf Complex and Kwame Mall, among others.
Hairdressers, restaurants, bottle store operators will also pay presumptive tax amounting ranging between $2 500 and $10 000 respectively.
Landlords will be responsible for the collection of the above taxes which take effect from 1 January 2021.
Those that fail to collect and remit the tax will be subject to a penalty equivalent to the amount of tax payable and interest.
A snap survey conducted by Business Weekly showed mixed feelings towards the new tax although the majority of 44 percent said the move to introduce the new taxes was the way to go.
Informal players that do not pay any form of tax provide unfair competition to formal businesses and those that pay tax.
SME Association of Zimbabwe Founder & Executive Officer, Farai Mutambanengwe, will be part of the panelists.
Kudzai Mubaiwa, cofounder of iZone Hub, a Zimbabwean hub that serves innovators, creatives and small business owners, will also be part of the panellist and Vision Tax Advisory managing director Trust Chiroora will complete the panel.
The discussion, which will be moderated by Business Weekly analyst, Kudzanai Sharara will commence at 3 pm and will be broadcast live on the Business Weekly Facebook Page
