EAZ welcomes quoting of state-owned entities on capital market

—The Economic Association of Zambia (EAZ) has welcomed government’s desire to quote State Owned Entities (SOEs) on the capital market.

 

In March this year Secretary to the Treasury, Fredson Yamba, urged the public to play a more effective role in managing and running SOEs in Zambia once they are listed on the stock market.

Several players have since called on government to list parastatals on the Lusaka Stock Exchange (LuSE) with the Institute of Organisation Development Facilitators (IODF) recommending that state-owned enterprises should list on LuSE to increase their performance.

 

EAZ Secretary, Kunda Chima, says government must sell portions of some of SOEs to the public so they can be traded.

 

Mr Chima said this in response to a press query from ZANIS in Lusaka today.

 

Mr Chima, however, stated that the question of profitability will determine the Initial Public Offering (IPO) for the shares to be traded on the market.

 

The IPO or stock Market Launch is a type of public offering where shares of stock in a company are sold to the general public on a securities exchange for the first time.

 

IPOs are used by companies to raise expansion capital to possibly monetise the investments of early private investors and to become publicly traded enterprises.

 

Mr Chima expressed doubt that SOEs have the required financial capacity to list on the market in their current state.

 

“It is doubtful that SOE’s have the latest audited accounts for the last five years which must have posted profits as this is the minimum requirement,” he said.

 

He noted that most SOEs do not publish their accounts on a regular basis, making the public unaware of their performance capacity.

 

He encouraged the entities to be transparent with their finances to encourage investment.