The Chief Executive Officer of the Mozambican Stock Exchange (BVM), Salim Valá, said that there was a need to encourage financial inclusion, boost the use of new technologies and focus on good corporate governance, as ways of strengthening the capital market in Mozambique.
According to Valá, it is necessary to give a new boost to financial education programmes, provide more information to businesspeople and investors about the products and services available (that is, how to access them and their advantages) and have the appropriate mechanisms available (modern technological platforms, attractive regulatory framework, incentives to attract non-resident investors, etc.).
Salim Valá was speaking during a conference on “Current Challenges of the Capital Market in Mozambique,” promoted by Business, Trading & Consulting (BTC), in partnership with the magazine Banca & Seguros, held on Tuesday, 11 October, in Maputo.
During the event, several themes were discussed such as the digitalization process, the “FinTechs”, the legal aspects pertaining to the capital market, the duties of information provision by the companies listed in the Stock Exchange, the responsibility of the financial intermediaries, the role of the supervisor, the negotiation of units of participation in Real Estate Investment Funds (FII), the tax incentives and the prevention and fight against money laundering and financing of terrorism.
In his speech, the PCA of BVM acknowledged the relevance of the event, highlighting the fact that it was promoted by two entities that promote the economy, focused on strengthening the financial sector and particularly the capital market in Mozambique.
Valá said that despite the BVM still being of small size, little depth and liquidity, and the economic context of the last five years having proved adverse, the main stock market indicators are positive.
“We have 11 listed companies in the share branch; the stock market capitalisation in absolute terms is 140.3 billion meticais; the stock market capitalisation as a percentage of the GDP is 20.54%; the turnover is 13.8 billion meticais; the liquidity index is 9.87%; financing to the economy is around 250.5 billion meticais; and 234 securities and 23 887 holders are registered at the Central Securities Depository (CVM),” he revealed.
According to the speaker, these figures express a remarkable improvement, in which one should highlight the decisive role of businessmen and investors who are increasingly using the capital market as a safe and profitable mechanism for savings, financing and investment.
“Although BVM is still of small size, little depth and liquidity, and the economic context of the last five years has proved adverse, the main stock market indicators are positive”
“Our strategic action should continue to be guided by the need to promote greater financial inclusion (broadening the citizen’s access to financial services), to promote greater coverage and to be concerned with the impact and sustainability of our interventions. It is essential to reduce information asymmetries and transaction costs, investing unequivocally in new information and communication technologies”, he said.
For the PCA of BVM, it is not only worth paying attention to the expansion of financial services, but it is also necessary to invest in improving the quality of demand, which has to do with strengthening human capital and institutions, stressing that this “can be done by institutes and universities, through capacity-building and training activities, events such as this, using the media, promoting ‘networking’ and horizontal learning, among other channels and formats”.
“It is pertinent to strengthen the governance and management of companies and to encourage transparency and ethics in business, ensuring that they provide regular, relevant and pertinent information to the market, through the existing mechanisms of BVM, allowing entrepreneurs and investors to be provided with quality information to make better informed decisions”, concluded Salim Valá.