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Datvest exchange traded fund lists on ZSE

04 Mar, 2022 - 00:03 0 Views
Datvest exchange traded fund lists on ZSE Finance, Economic Development and Investment Promotion Ministry secretary, George Guvamatanga

eBusiness Weekly

Nelson Gahadza

Government has said capital markets are part of the country’s economic development agenda hence the listing of the Datvest Modified Consumer Staples exchange traded fund (MCS ETF) speaks to authorities’ unrelenting efforts to continuously open up the economy.

Finance and Economic Development Ministry’s permanent secretary, George Guvamatanga, officially launched the Datvest MCS ETF in Harare yesterday and said current efforts by the government seek 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 that is commendable,” he said.

He said over the years, the Global market has witnessed an exponential growth in ETFs, accounting for market capitalisation in excess of trillions of 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 speaks to the government’s unrelenting efforts to continuously open up the economy, invite more players and integrate the national financial inclusion strategy.
According to the Finscope survey of 2014, about 74 percent of the country’s population remain 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 specified security which include 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 seeks 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.

Mudavanhu added that the Group’s penetration into the equities market through Datvest speaks 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 gaining momentum.

He said the Datvest ETF tracks the ZSE index which is the modified consumer staple index and looking at counters who have backing fundamentals of the consumer such as Delta, Innscor, Ok Zimbabwe, Hippo Valley, Simbisa, Meikles, TSL, African distillers and Dairiboard.

“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, by 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.
According to the prospectors, all assets of the fund will be held by CBZ Custodial Services who 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 is 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.

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