LUSE entices SMEs on alternative markets

LUSE entices SMEs on alternative markets

Chipata, August 5, 2014, ZANIS…..Lusaka Stock Exchange (LuSE) Chief Executive Officer (CEO) Brain Tembo has urged Small and Medium Enterprises (SMEs) to list on alternative markets as a way of growing their businesses.

Mr. Tembo says there is need for small scale business persons to take advantage of available formation on alternative markets and establish their businesses.

An alternative market is a sub-market of a main stock exchange that permits smaller companies to participate with greater regulatory flexibility than applies to the main market.

This includes no set requirements for capitalization or the number of shares issued.

Speaking in Chipata yesterday at the alternative market sensitization pre-launch workshop, Mr. Tembo disclosed that stock markets are an important investment strategy for a growing economy like Zambia.

He said this is because investors make decisions based on the shares available on the market.

Mr Tembo noted that it was for this reason that growing businesses like SMEs should utilize the alternative markets and improve their businesses.

Mr. Tembo explained that LuSE decided to introduce an alternative market as a way of creating a more enabling platform for SMEs to participate on the capital markets thereby raise capital for themselves.

He said the market is also aimed at increasing accessibility to the stock market by both SMEs and consumers.

He said if properly utilized alternative markets can be a reliable source of funding for SMEs adding that they can also provide a stable and rapid job creation through business expansion activities of listed SMEs.

Earlier, Security Exchange Commission CEO Wala Chabala said a small medium entity is an engine of economic development in any economy as it creates employment and contributes to the Gross National Product (GNP) of the country.

Dr. Chabala noted that however, studies have shown that SMEs are struggling to perform their duties due to lack of funding and financial assistance.

He said to this effect the small businesses should start appreciating the use of raising funds through capital markets.

He further encouraged SMEs to go the alternative market route as it seeks to help smaller and growing companies to raise capital while providing investors with exposure to the same  in a regulated environment.