THE JSE Stock Exchange says mining companies in Zambia should consider floating shares through dual listing to effectively tap into international investors.
And the stock exchange has commended First Quantum Minerals (FQM)for the recent announcement to float shares on the local bourse saying it will increase confidence in the economy.
JSE business development manager Geoff Musekiwa said there is need for African countries such as Zambia to encourage dual listings to be able to tap into deeper markets for development capital.
“Companies with mining activities in African countries will be able to raise significant funds for new and existing projects if dual listings through initial public offers are effectively pursued,” he said.
He said dual listing is important because firms are able to identify with certain assets and diversify investment portfolio with a view of available assets.
A dual-listed company or DLC is a corporate structure in which two corporations function as a single operating business through a legal equalisation agreement, but retain separate legal identities and stock exchange listings.
Mr Musekiwa said this in a presentation dubbed ‘Capital Raising in African Capital markets- Building Competitive Environments’ at Zambia’s first International Mining and Energy indaba and exhibition in Lusaka yesterday.
He said countries such as Zambia with only one mining stock listing, Zimbabwe with four, Ghana with two and Mali with 11 could benefit immensely if more companies floated shares via dual listing.
He called for an international best practice standard for capital markets, correspondence of ideas in harmonising the capital market system and introducing new products on African stock markets if more mining firms are to be motivated to raise capital.
He said capital markets in most African countries are starved of investment instruments for capital raising hence the need for effective measures to remedy the situation.
On FQM listing, Mr Musekiwa said the move by the company to list shares is a positive step for the growth of the capital market.
He called for more education programmes that will inspire more firms to list shares for long-term financing of various developmental projects.
The JSE Stock Exchange (previously the JSE Securities Exchange and the Johannesburg Stock Exchange) lists more than 400 companies and has market capitalisation of over $182 billion, making it the largest exchange in Africa and among the top ten in the world.
The exchange trades shares for a wide variety of industries, with the largest portion of market capitalisation coming from the mining industry.
[Zambia Daily Mail]
