Zimbabwe will next month commence repatriation of sale proceeds and dividends for foreign investors on the Zimbabwe Stock Exchange (ZSE), following establishment of the country’s Portfolio Investment Fund (PIF).
Reserve Bank of Zimbabwe (RBZ) governor John Mangudya yesterday said the central bank had identified three banks to manage the $5 million fund.
“Three banks have been identified that are going to manage that fund: Stanchart, Stanbic and CBZ… If all goes according to plan, repatriations will start by October,” Mangudya said at the State House on the sidelines of a meeting between Zimbabwe’s business leaders and President Robert Mugabe.
After the ZSE recorded huge outflows from foreign buyers as listed counters failed to repatriate dividend to shareholders outside the country, Mangudya put in place the PIF – which became effective last week – to prioritise sale proceeds for the initial investment, dividends and then capital gains.
The central banker also pointed out that the RBZ and managing banks were now in the process of opening accounts and liaising with stock brokers regarding the dues to be repatriated.
“The first part was to announce we had put the system in place, secondly, opening of accounts with the banks, thirdly, liaising with the stock brokers, asset managers and the banks so that we can see which ones to access because our proposal which we had given them was we would start with capital out then capital appreciation then giving them the funds,” said Mangudya.
Some of the companies struggling to repatriate dividend include Zimbabwe’s largest cigarette manufacturer, British American Tobacco (BAT) which has failed to pay over $11 million in dividend to its offshore major shareholder, British American Plc, over the past year.
Foreign participation on the ZSE – which has been on a bull run driven by local institutional investors – has been very low in the last couple of year due to delays in paying sales proceeds and dividends to foreign investors.
As a result, foreign investors’ influence and activity on the bourse have been waning. – The Source