Madison’s LuSE listing welcome

IT IS encouraging that more Zambian companies are showing interest in listing on the Lusaka Stock Exchange (LuSE).
The more local companies list on the bourse, the easier it will be for the private sector to access cheaper financing on the capital market.
We refer to the announcement by the LSA Group of Companies on page seven of yesterday’s edition that it intends to offload 40 percent of shares in its subsidiary, Madison Financial Services, on the Lusaka Stock Exchange.
LSA Group executive chairperson Lawrence Sikutwa said the listing is meant to enable members of the public to participate in the operations of the company.
LSA joins other local corporations such as Zambeef Products Plc and Copperbelt Energy Corporation (CEC) which have listed on the LuSE to attract public participation in their affairs.
We are happy to learn from Mr Sikutwa that the process of listing has reached an advanced stage. Mr Sikutwa said the process is expected to be completed by April, which is quite soon.
This must be good for LuSE, which a month ago bemoaned the slow pace at which the local capital market has been growing.
The stock exchange is a cost-effective alternative source of capital, which should attract the attention of all viable companies.
A strong capital market is important for the growth of the country’s economy because it ensures that money is available for financing projects.
This is because instead of going to the banks to borrow money at exploitative interest rates, companies can access this capital at the bourse through the floating of shares to the public.
Zambians must take advantage of the offloading of the 40 percent shares in April and buy a stake in Madison Financial Services through the local stock brokers.
The more Zambians participate in the ownership of strong and well performing indigenous companies the better.
The dividends the company will declare and pay to the local shareholders will not be externalised as is the case with foreign owned companies.
Some of the shareholders will leave the dividends to regenerate through re-investment while some will get the money and invest it elsewhere within Zambia.
What is even more heartening is Mr Sikutwa’s announcement that plans are underway to list another LSA subsidiary, the Amalgamated Tourism Investment Limited on LuSE.
The company runs some of the most viable businesses in the tourism industry in Livingstone.
It will, therefore, be a great opportunity for Zambians participating in Zambia’s bourgeoning hospitality and tourism industries through the acquisition of shares once the company is listed.
It is good that Mr Sikutwa’s announcement comes at a time Zambia is hosting an important gathering of capital markets in Livingstone.
The Africa Middle East Regional Committee aims at harmonising the operations of banks and capital markets.
We challenge the banks operating in Zambia that are participating in the indaba to seriously consider how they can play a positive role in government’s efforts aimed at empowering citizens.
One way of empowering citizens is to help them acquire shares on the stock exchange.
They can, for example, come up with tailored packages aimed at helping small-and-medium-scale enterprises and individuals interested in acquiring shares on the local bourse.
The banks are being blamed for hampering the participation of SMEs in the country’s economy by imposing rigid and exploitative conditions on borrowing.
They should emulate Madison Financial Services, which will soon offload 40 percent of its shares on LuSE.
We are encouraging other indigenous companies to clean up their balance sheets and list on LuSE so that they broaden the participation by citizens of this country.