Datvest lists ETF on ZSE

Blessing Mudavanhu
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DATVEST Asset Management Company listed its exchange traded fund (ETF) on the Zimbabwe Stock Exchange (ZSE) yesterday, with the Treasury saying this testified to the Government’s commitment to continuously open up the economy.

Secretary for Finance and Economic Development Ministry’s George Guvamatanga said this at the official launch of the Datvest’s Modified Consumer Staples Exchange Traded Fund (ETF) yesterday.

Mr Guvamatanga said capital markets were part of Zimbabwe’s economic development agenda, which is demonstrated by its unrelenting efforts to continuously open up the economy.

He said efforts were underway by the Government to address financial inclusion disparities in the economy through inviting more players to integrate the national financial inclusion strategy.

“The Datvest Modified Consumer Staples Exchange Traded Fund raised the number of ETFs listed on the Zimbabwe Stock Exchange (ZSE) to three, following the listing of Old Mutual Zimbabwe and Morgan and Co ETFs. Development of these products creates value for retail and institutional investors in our local markets which is commendable,” he said.

He said over the years, the global market had witnessed exponential growth in ETFs, accounting for market capitalisation in excess of trillions of US dollars, which has triggered interest in many investors.

“The growth is largely due to the rising acceptance in indexing from both retail and institutional investors and this has become a significant mainstream component of the financial market place,” said Guvamatanga.

He noted that the coming in of Datvest, a unit of CBZ Holdings, speaks to the Government’s unrelenting efforts to continuously open up the economy, invite more investors and integrate the national financial inclusion strategy.

According to the Finscope survey of 2014, about 74 percent of the country’s population remains excluded from the capital markets.

“As a result, we applaud innovations such as Datvest and we call for more financial institutions to follow,” he said.

ETFs are passively managed, fully funded (unleveraged) open ended funds which track the performance of a specific security, which includes but are not limited to indices, commodities, currencies or any other asset.

CBZ group chief executive, Blessing Mudavanhu said the launch of the Datvest MCS ETF sought to diversify the group’s revenue streams while playing a key role in national financial inclusion.

“ETFs have been available for over 20 years, although it is still relatively new in the Zimbabwe market, it is a basket of securities that allows an investor to participate and have exposure to various investment options without necessarily purchasing the underlying asset.

“The launch of such financial innovations comes after the CBZ Holdings growth strategy and seeks to diversify income revenue streams for our customers,” he said.

Mr Mudavanhu added that the group’s penetration into the equities market through Datvest was linked to a variety of portfolio products and other alternative investments that the group has.

“As a result, as CBZ we are positioned to take an active role in the primary and secondary markets, so the enthusiasm behind Datvest MCS ETF shows that we are ready to support government efforts on national financial inclusion,” he said.

Datvest managing director, Tendai Muzadzi said as of 2020, the Global ETF market reached US$7,7 trillion, which is quite a significant investment gain momentum.

He said the Datvest ETF tracked the ZSE index, which is the modified consumer staple index and looking at counters backed by fundamentals of consumer products such as Delta, Innscor, Ok Zimbabwe, Hippo Valley, Simbisa, Meikles, TSL , African distillers and Dairibord.

“We will continue to modify it, but the rebalancing will be done on a quarterly basis,” he said.

According to a prospectus statement for the ETF, CBZ Asset Management will put initial seed capital in the form of scrip in the exact weights of the ZSE Modified Consumer Staples Index.

The statement highlighted that investors who wish to invest in the fund can do so through two ways; buying units in the ETF through any registered stockbroker or alternatively investing in kind by delivering a basket of stocks in the exact weights of the fund through an authorized participant.

The prospectors also says all assets of the fund will be held by CBZ Custodial Services, which will act as custodian for the fund while Stanbic Bank Zimbabwe is the Trustee.

Additionally, settlement of trades in the units will be done in electronic format in accordance with the settlement modalities approved by the Zimbabwe Stock Exchange.

“This investment offers investors an opportunity to own the underlying stocks on the ZSE Modified Consumer Staples Index through one investment in the Datvest MCS ETF.

“Therefore, the investor does not have any additional tasks or costs over and above those associated with dealing in any other publicly traded security,” said Datvest.

ZSE chairperson Caroline Sandura, said the launch of the Datvest ETF was a first of many capital products by CBZ to come, highlighting that most of the ETFs on the Johannesburg Stock Exchange (JSE) are sponsored by banks.

“However, it is unfortunate that the Banking Act has some restrictions on the participation of banks on the market but products such as derivatives and other asset backed securities are best sponsored by liquid institutions such as Banks,” she said.

She noted that ZSE is planning on the master plan for REITS and the market is eager for new securities products.

Source: Herald