SOME financial service firms and other big entities are shunning LuSE

Standard Chartered Bank
SOME financial service firms and other big entities are shunning the Lusaka Stock Exchange (LuSE), while multinational firms already listed maintain minimal free-floats, while raising the floats in other countries.

About half of the listed companies on the LuSE are in breach of the listing rules by having free-float levels of less than 25 per cent.

Securities and Exchange Commission (SEC) chairperson Chintu Mulendema said the failure by commercial banks and other multi-national companies to list on LuSE in Zambia was worrying.

Mr Mulendema said during the breakfast meeting hosted in his honour in Lusaka yesterday that when he left the SEC board in 2010, the number of listed firms was 21.

“I am back on the board as chairman and I note that the number of listed entities has remained essentially the same – with only one additional company listing this year… The question for all of us is if Prima Re-Insurance can come to market so successfully what stops other companies doing it?” he wondered.

Mr Mulendema noted that the free-float levels essentially remained static, changing only to the extent of the new entrant and a few corporate actions which did not necessarily entail increasing the free float.

He said the number of listed entities had remained nearly the same since the exchange’s inception about 20 years ago.

“About half of the listed companies, some of whom are represented here, are below the required free float level of 25 per cent, and, therefore, in breach of the listing rules,” he said.

He wondered why companies like Lafarge with 65 per cent free-float on the exchange in Paris, could struggle to float more than 25 per cent in Zambia.

Mr Mulendama said Standard Chartered Bank was another example with big free-floats in London and Hong Kong but had only 10 per cent in Zambia.

Mr Mulendema said that SEC, together with LuSE, having this year engaged all those who were in breach of the listing rules expected that all should put in place plans to bring the free float in line with the rules.

He further wondered as to why the budget speech barely mentions the capital markets and the same was the case with most economic reviews on Zambia done by various parties like the World Bank.

But Stanbic Bank head personal and business banking Mukwandi Chibesakunda said various barriers among them exorbitant fees had made it difficult for most commercial banks to list on LuSE.

[Times of Zambia]