Download - Mozambique Stock Exchange
Mozambique Stock Exchange
Page 1
MOZAMBIQUE STOCK EXCHANGE 1. ABSTRACT
After more than seven years of effective activity in the Mozambique
Stock Exchange, the effort to attain stability and operational
regularity in the performance of all of the tasks that the stock
exchange had to attend to before the market place, striving not only
for the satisfaction of the of the service levels that we understand
due, but also to gain institutional and operational, credibility and
confidence, of all of those participating in this market.
Having attained the normal level of activity after its start-up, the
Mozambique Stock Exchange has lead its course of action towards
providing more efficient services to those parties and affiliates: The
authorities and other State entities, the business sector, public sector,
institutional and individual investors, and, naturally, the financial
institutions. This report contains information that serves as a
testimony of the results of the input towards innovation, perfection
and response to the constantly emerging needs of the market such as
have been, and will continue to be.
Even though we are dealing with a relatively new reality, the stock
exchange has had an influence in managing and dealing with
securities in the secondary market. This new establishment has made
important contributions that stimulate development and
consolidation of technical and operational set of actions, in
Mozambique Stock Exchange
Page 2
accordance with the Government sector, private sector, and financial
institutions. All of these constitute the fundamentals for the
economic and social development of our country.
The last point refers to the basics of the stock exchange. In fact, it
has deserved and will continue to deserve, our close attention:
Promoting the growth in the practices of business management to
result in a transparent, rational, efficient, and competitive manner,
getting closer to the businesses in the market, and contributing to an
education focused on a market economy. This will continue to be
done, without leaving the professionalism and specialization
demanded by the financial institutions, to diversify the nature of their
negotiable financial products.
The current development stage of the stock exchange would not be
possible to achieve without the confidence that have been placed
upon the Capital Market and the Mozambique Stock Exchange given
by the unconditional support of the Government, the Bank of
Mozambique and the National Treasury Department, the financial
institutions and dealers/brokers, and finally the listed security
issuers.
Mozambique Stock Exchange
Page 3
2. HISTORY
In 1997, the Government of Mozambique, through the Ministry of
Planning and Finance, established the “Stock Exchange Installation
Commission”, whose mission has been to promote better and more
efficient control of the capital market in Mozambique. That is, from
the creation of an institutional structure and is legal framework, as
well as, to create the stock exchange. As from the beginning, this
was the most reliably appointed figure to perform the task for an
efficient functioning of a secondary market involved in securities
trading.
Throughout the course of this important period, the organization of
the Installation Commission’s activities initiated effectively by
having a month long internship at the Lisbon Stock Exchange which
began on the 18th of February in 1997, until march. This could only
happen with the most suitable human resources and the adequate
financial investment provided by the Mozambican Government,
along with the World Bank.
As a matter of fact, it’s important to point out the positive way in
which the internship occurred, and as a result, creating a closer
relationship between the Installation Commission and the Lisbon
Stock Exchange. This relationship was officially formalized in
March of 1996 with a celebration of a cooperation protocol between
the Mozambique Ministry of Planning and Finance and the Lisbon
Stock Exchange. The protocol considered as the main vectors to
Mozambique Stock Exchange
Page 4
undertake, the establishment of a legal framework for the market, the
professional team involved in the project, the aid in Mozambique
privatization programs in aiming as listings arising from this process.
Finally they agreed upon aid on installing technical structures and
operating systems essential for the proper functioning and smooth
running of a stock exchange in Mozambique.
Throughout the years 1997, 1998 and 1999 the Installation
Commission created all the necessary prerequisites for organizing
the capital market in Mozambique.
These were focused on:
• Elaboration of the legal framework needed for on operating market;
• Establishment of the supervision structure directly linked to the
Bank of Mozambique.
• Within the financial institutions, a restructuring process related to
the securities business activities;
• Creation of the necessary conditions for all allocating the Treasury
with an immediate bond issue, “Obrigações do Tesouro 1999”,
aimed to be the first security listed in the Mozambique Stock
Exchange.
• Establishment of an operational model on how the markets works;
Mozambique Stock Exchange
Page 5
• Development of the necessary operational systems, such as
electronic trading systems; clearing and settlement systems;
• Lastly, training the market operators from the public administration
level, to the financial intermediaries and the business sector at large.
The activities undertaken by the Installation Commission lead up to
the inauguration of the Mozambique Stock Exchange on October 14,
1999 market by the first normal stock exchange trading session to
take place. During this historical moment the session was opened by,
the Minister of Planning and Finance, His Excellence, Dr. Tomaz
Augusto Salomão. In this session 920 treasury bonds were traded at a
price of 1,005,000 MZM each having established the market buying
price.
A remarkable aspect of this breaking point in history was also the
creation of the Decree number 49198, on September 22. This decree
approves the internal rules and regulations of the Mozambique Stock
Exchange, and it recognized the nature of this entity as a public
institute endowed with administrative, financial as patrimonial
autonomy.
Main Events
From the star-up date of the stock exchange activities, the above-
mentioned operational model was set to operate twice a week, every
Tuesday. Electronic operational functions were carried out for
trading, clearing, and settlement. The stock market operators were
Mozambique Stock Exchange
Page 6
trading via a local network system. Initially, the trading began as call
system which enabled the base quotation for each security to be
determined in each session. The first trade was initiated with one
security listed – “Treasury Bonds 1999” and all of them were
physical scripts.
Ever since then, until the end of the year 2002, which is the period
covered in this report, considering the activities mentioned in the
MSE action plan – running the securities market -, as well as the
contribution for the development of the nation, expansion,
consolidation, and product diversification in the Mozambican capital
markets, we could highlight the following initiatives and
accomplishments:
• In February 2000 we observed the first public bonds subscription
made by a private company (a corporate bond of Madal company).
• Installation of a remote trading network system with a direct access
to the stock market, therefore making it possible for consultation
among the stock market operators without need for a physical
moving from one location to another. This was done by making
information available via wireless internet, for faster, safer and
trustworthy conditions;
• In the last quarter of 2000, a number of steps were put in aimed at
informing a variety of related groups i.e. Professionals from both
financial and business sectors as well as universities ant the general
public
Mozambique Stock Exchange
Page 7
• Creation of legal framework for dematerialized securities through the
Decree number 34/2000, of 27th of October, included in the MSE
operation circulars.
• Establishment of the clearing and settlement control system for the
securities positions that were registered at each financial
intermediary, according to the legal rules regulations that previously
had been agreed upon.
• The launch of the initial public offer, whose results were summarized
at the first special trading session taken place at the MSE on
December 2001 (State sales offer of its minority shares holding in
the private company, Cervejas de Moçambique – CDM).
• The first listing of shares, with the sequential establishment of the
public offer mentioned above (listing of two categories of shares by
CDM, one for the general public and the other can only be traded
amongst managers and workers);
• The increasing of the trading days from having it twice a week
Tuesday and Thursday to five days a week, as of the month of
November 2002.
• Establishment of a new trading system – Registered Trading System
– oriented to institutional investors and to complement the existing
one, the call trade system, whose continuity was not only secured but
Mozambique Stock Exchange
Page 8
improved through new rules established in the Mozambique Stock
Exchange Circular stating the trading disciplinary actions;
• Progressive Increase in the number of the stock exchange operators
to six;
• Finally increase on the number of listed securities to 14, and the
market capitalization over US$400 Millions.
Institutional outlook
The Mozambican Securities market is organized around the
intervention by the following entities:
Firstly, the Mozambican Government, who has the power to define
the general guidelines, which rules the securities. The specific
Government sector responsible for this task is the Minister of
Planning and Finance, whom has the guardianship over the
Mozambique Stock Exchange.
The Bank of Mozambique, in its own right, is the entity responsible
for the supervision and surveillance in both the primary and
secondary securities market, and also to all market operators. It is
also responsible for regulation of everything except to those matters
expressly reserved to the Minister of the Planning and Finances, if it
finds foreseen in the securities legislation.
Mozambique Stock Exchange
Page 9
The Mozambique Stock Exchange is the market management entity,
endowed with the means necessary to ensure continuity in an open
and free market (through authorized intermediaries, the buying and
selling of securities) and also has the competence to regulate matters
related to the operations.
The financial intermediaries are collective entities, either of public or
private nature, legally qualified to professionally perform financial
mediation activities at the stock market.
The stock exchange operators are financial intermediaries,
authorized to execute transactions within the Mozambique Stock
Exchange, on their own, as well as on behalf of the third parties.
The financial intermediation activities can only be exercise by
collective entities whom are recognized as qualified for, in the terms
specified in the Ministerial Diploma 10/99 of February 24th and
Decree 15/99 of November 1st. To exercise the activities undertaken
as a stock market operator (Brokers or Dealers), these entities need
to be registered in the Mozambique Stock Exchange.
In the Mozambique context, and in light of the 14th of June 1999
Ruling of the Minister of Planning and Finance, the banks with
headquarters in domestic territory are authorized to exercise
activities of stock market operators, having undertaken the figure of
a Dealer.
Mozambique Stock Exchange
Page 10
The financial mediation activities taking place in the Mozambique
Stock Exchange are constituted of six entities; all are dealers their
identities go as follows:
• BIM Banco Internacional de Moçambique
• Standard Bank de Moçambique
• BCI Fomento - Banco Comercial e de Investimento
• BPI Dealer ( Moçambique) Sociedade Financeira de Corretagem
• Barclays Bank
• CPC – Cooperativa de Poupança e Crédito
The Investor Protection and Aid
The legislation and regulations that were established were set with
strict and vigorous rules aiming at protecting the investor to the
utmost: In this case, by disclosing all legal information to be given
to issuers, and also the conditions to accomplish the market
operations and, especially, the conditions of exerting the financial
intermediation activities.
On the other hand, the Mozambique Stock Exchange has actively
evolved supplying information and helping investors, especially
individual investors, aiming and providing any clarification on how
to intervene in the market.
Mozambique Stock Exchange
Page 11
Integrity, Transparence and Equality in the Market
The way in which the market is organized and structured, namely the
financial intermediaries’ duties such as executing operations and
provision of services, the principle of professional secrecy, of
information given by issuing the market and the nature of the
functions attributed to the Bank of Mozambique, establish the right
conditions for an effective and efficient market in terms of integrity,
regularity, normality and transparence.
Registered and Follow-Up
In the development of its attributions, the Mozambique Stock
Exchange has been always registering everything relating to its
activities. This includes the following material:
• Registering of the issuers, mainly listing, suspensions, delisting, and
re-listing of securities issued, and all of the relevant facts that
characterize the issuers´ jurisdiction:
• Individual registering of the identity of the stock exchange sponsors;
• Registering the stock exchange operators who are authorized to carry
out operations as well as individual registering of all their mandates;
• Registering of all the effective operations;
Mozambique Stock Exchange
Page 12
• Registering of all the tripled buy or sell notes, relating to effective
operations, issued by the operators;
• Registering of the reports of all the issues that were publicized;
• Registering of all the special trading sessions taken place;
• Registering of any disciplinary sanctions applied.
Information Dissemination and its Quality
The information dissemination related to trading in the stock
exchange, the operations that take place in the market outside the
stock exchange, as well as all the information referring to the market
and any circumstances related to issuers, are published at the Stock
Exchange Bulletin, with the reference to every stock market trading
sessions carried out.
This publication discloses all the information about the stock market
issued securities characteristics, namely:
• In the case of share, the issuer name, the nominal value and quantity
of the listed securities, amount of dividends and other retribution
attributed to each share, and the date of the last divided distribution
occurred;
Mozambique Stock Exchange
Page 13
• In the case of bonds and other debt-related securities, the nominal
value and quantity listed, the nominal interest rate, the daily interest,
the listing year and dates of interest payments, and its maturity date.
With respect to stock exchange’s effective operations, and relatively
to each security traded during the lock session, the object to offers to
buying or selling, without the confirmation of any trade occurring,
the Bolentim de Cotações (Listings Bulletin) refer to:
• Effective quotations or price
• The best proposals for buying and selling of available securities
• The quantities that were involved in each transaction.
The Stock Exchange Bulletin supplies information on the monthly
and annual trading sessions gathered in each one of its systems and
presents the market capitalization for each session taken place, and
of the previous one, as well as its respective percentage change.
This publication also contains information on the financial
intermediaries, members of the Mozambique Stock Exchange’s
trading, clearing and settlement system, including their names and
details of their mandates.
Mozambique Stock Exchange
Page 14
3. LEGAL FRAMEWORK
In its own as the markets managing entity, the stock exchange also
carried out task in building up regulation and actions to regulate the
market. That is whether elaborating the proposed legislative and
regulatory initiatives, or participating along with other authorities, in
regulating different subject matters not only directly linked to the
Mozambique Stock Exchange, but also reflect upon the performance
of securities within the market.
In the range of attributions for each market participant with the aim of
endowing the market with better organization, operation, transparency,
and there published the following legal documents:
Decrees number 48/98 and 49/98, both from of September 22nd,
emanated by the Ministers Cabinet. The first one establishes the
general rules about the securities market in Mozambique. The second
one recognizes the creation of the Mozambique Stock Exchange and
approves its Internal Rules.
The Ministerial Diploma number 10/99, of February 24th, of the
Ministry of Planning and Finance, monitors the activity of the
financial intermediaries dealing with securities including their access
to financial intermediation at the Mozambique Stock Exchange;
Mozambique Stock Exchange
Page 15
The approval by the Cabinet of the Decree 34/2000 of October 17th,
states the steps to be taken and the formalities applied in issuing,
registering, circulation, and control of dematerialized securities.
The Decree 61/2003 of December 14th, exempts of taxes (IRPC –
personal annual tax and IRPC – company annual tax) all the incomes
of the listed securities in Mozambique Stock Exchange. Also the legal
acts concerned with the listed securities are exempts of stamp duties.
The Decree 21/2005 of May 31st, establishes a new type of security
named “Commercial Paper”.
Notices number 2/GGBM/99, 3/GGBM/99, and 4/GGBM/99, of
March 14th , from the Bank of Mozambique , determined what the
taxes and commissions should be charged for both transactions carried
out within the stock market – Notice no. 2, and outside of the stock
market- Notice no. 3. It also regulates the conditions for the initial
public offers (Notice no.4).
The Decree 25/2006 of August 23rd, establishes a securities
depository, where the company registration will be mandatory to any
domestic company.
The Mozambique Stock Exchange not only intervenes in the market as
the managing entity, but also as entity with legislative powers.
Mozambique Stock Exchange
Page 16
Because of both of these attributions the stock exchange published the
following legal diplomas:
• Circular no. 1/GPCDBVM/99 stating the stock market operator’s
organizational and registering conditions and their mandates;
• Circular no. 2/GPCDBVM/99 regulates the conditions for listing
securities at the stock exchange;
• Circular nº 5/GPCDBVM/01 is directed towards regulating the
clearing and the settlement of the market operations.
• Circular nº 1/GPCDBVM/02, concerning to the stock exchange
sessions, trading and financial settlement;
Mozambique Stock Exchange
Page 17
4. LATEST ACHIEVEMENTS
a) Legislative Changes
The regulatory framework establishing a new securities code was
submitted for approval by the Government.
b) Market Developments
The Exchange is engaged in a nationwide process of consultation
with the domestic business community as to the mechanisms as to
launch a secondary listing board aiming at capturing the medium
size companies.
It is also a process of defining the strategy on how to introduce
the concept of securities depository among the business, since the
company registration will be mandatory to any domestic
company.
Mozambique Stock Exchange
Page 18
5. FUTURE PLANS
With growing economic and market globalization, the dynamism,
sophistication, and expansion of services rendered by the financial
sector, the continuous need for businesses to grow, develop and
diversify their activities, and the increasing demands from investors,
whether in terms of the quality of the services, or in maximizing their
profits benefits for their servings, all of these require a continuous
developing market, with the ability to fully respond to all their needs.
Throughout the time that the Mozambique Stock Exchange
concentrated the efforts to fully reaching the necessary stability and
operational regularity, bringing security and, proportionally, a level
of services that are efficient enough for the various agents within the
market, there is all need for a strategic thinking to consolidate,
expand and develop the Mozambican securities market, and the stock
exchange itself.
The stock market dynamism and its continuing and sustained growth,
will be possible through an already, clear and objective well defined
plan for a strategic orientation. This plan has to be rigorous in
reaching its goals, and also, in its pre-determined actions and
towards progress.
Under its attributions and competences as the securities´ managing
entity, from the 3rd quarter of 2002, the Mozambique Stock
Exchange, did establish a master action plan with the view of a time
Mozambique Stock Exchange
Page 19
limit no less than three years. The objective of such a plan is to
endow the market with renewed dynamism of consistency and
amplitude in the Mozambican stock market, and equally in the
Mozambique Stock Exchange.
The context of the referred orientation plan, the nature of outlined
measures cover material starting from the market’s institutional
organization to the details of operational efficiency. This covers the
structural limitations of the functional operations of the market,
similarly, the actions that interact with all others market participants
– the authorities, the financial intermediaries, businesses and the
investors.
After the guidelines have been established, there was all need to look
for ways to create the right environment to launch fundamental
strategic goals for another way of functioning and expression of the
securities market, such as:
• Promoting joint actions that stimulate effective expansion and
growth in the structure of the primary and secondary market;
• Develop actions that allow for greater visibility of the market,
contributing to an adequate acknowledgement of its role and
credibility;
• Create the conditions so that the Mozambique Stock Exchange can
reinforce its position in the midst of the financial market;
Mozambique Stock Exchange
Page 20
• Installing the necessary means of diverse nature to function and
maintain at a high technical standards;
• Incite broad general knowledge of the market, so that there is high
level of professionalism from all participants.
• Establish favourable structural and operational conditions for
interaction with the global market.
• Agree upon the joint measures to be taken for the internal
organization of the institution the vision of internal efficiency and
the level of services rendered.
Mozambique Stock Exchange
Page 21
The Stock Exchange Dealers
BPI Dealer - Soc. Fin. de Corretagem Av. Julius Nyerere , nº 210 CP 1016 Maputo Telefone: +258 21 494009 / +258 21 491170 Fax: +258 21 493412 E-mail: [email protected] Contacto: Dra Isabel Mansour Andrade Augusto Mulenza Rui Jorge Cardoso
Standard Bank Praça 25 de Junho, nº 1 CP 2086 / 1119 Maputo Telefone: +258 21 352500 / +258 21 352566 Fax: +258 21 352563 Contacto: Dra. Cláudia Conceição Dr. Fernando de Oliveira
Barclays Bank Moçambique Av. 25 de Setembro, nº 1184 Maputo Telefone: +258 21 313453 / +258 21 303037 / +258 21 314647 Fax: +258 21 313454 E-mail: [email protected] joaquinal@barclays .co.mz Contacto: Werner Pauw Joaquina Litsure
Banco Comercial de Investimento Av. 25 de Setembro, prédio John Orr’s, 1645 CP 4765 Maputo Telefone: +258 21 353722 / +258 21 353723 / +258 21 309832 Fax: +258 21 311613 / +258 21 307152 E-mail: [email protected] [email protected] Contacto: Manuel Soares Acácio Mondlane
Millennium bim Av. 25 de Setembro, 1800, 16º Piso CP 2657 Maputo Telefone: +258 21 351551 Fax: +258 21 354393/4 E-mail: [email protected] Contacto: António Silva Pinheiro
Cooperativa de Poupança e Crédito Av. 25 de Setembro nº 1695 – 3º andar Maputo Telefone: +258 21 307753 Fax: +258 21 307754 E-mail: [email protected] Contactos: José Vaz Pele Fernandes Rosa Mertina Telma Augusto Guambe Sandra Cristina Mendes Lopes Amina Jamal