The Chairman of the Board of Directors (PCA) of the Mozambican Stock Exchange (BVM)
, Salim Cripton Valá, defended, on the 26th of June, in the City of Matola, that it makes perfect sense for companies in the Province of Maputo to bet on mechanisms financing alternatives via the BVM, as it is cheaper, spreads risk and contributes to better corporate governance.
In this sense, Salim Valá pointed to the Capital Market and the Stock Exchange as a reliable solution capable of responding to the liquidity challenges faced by a significant number of companies operating in the national market.
The Chairman of the Board of Directors of BVM launched the challenge during the Business Conference of the Province of Maputo, in which he was invited to address the “Financing Opportunities for companies in the Province of Maputo”.
“The banking sector is the one that, from a formal point of view, has been granting more credit to the economy. Many entrepreneurs still do not resort to the Capital Market or the Stock Exchange for financing. Stock exchanges are for companies, entrepreneurs and investors, therefore, we have to strengthen the Capital Market. Because if the Capital Market does not become dynamic, vibrant and broader, it will affect the sustainability of the entire financial system”, said Salim Cripton Valá.
However, although the BVM seeks today to assume itself as an alternative to traditional bank financing, Valá recalled that there are basic requirements that must be followed by companies to be listed on the stock exchange. In this wake, they pontificate good economic and financial health; organized accounting and audited accounts; as well as shareholder dispersion (they are public limited companies), which, in the PCA's opinion, are not negotiable, as the Stock Exchange is not an institution that “sells empty boxes”.
Alongside the Official Quotations Market (for large companies and the State), the Mozambican Stock Exchange has a Second Market (for Small and Medium-sized Companies – created in 2009) and a Third Market (incubation), created in 2019, for companies that do not meet all the requirements demanded in the Official Listed Market and in the Second Market.
The BVM director invited entrepreneurs from the agribusiness, tourism, transport and logistics, manufacturing, technology and construction sectors to use the financial instruments available at the BVM. To do so, they need to have a well-managed company, focus on transparency, have a viable project and be subject to public scrutiny.
Despite the signs of economic recovery, Salim Valá recalled that national companies, with emphasis on Small and Medium-sized Companies, will continue to suffer from structural problems and external shocks.
“Many businessmen and investors, in various corners of the world, when they want to invest in large infrastructures, equipment, new products, use the Capital Market, because it is a medium and long term perspective. The price of money is cheaper and it is possible to disperse the risk of these investments”, underlined Valá.
On the occasion, BVM and ACIM signed a Memorandum of Understanding, with a view to allowing associated companies to be listed on the stock exchange, promoting the continuous improvement of the business environment and competitiveness of the national economy, through the provision of financial information and market, for the sustainable development of the Capital Market.
The Business Conference of the Province of Maputo, a one-day event, was co-organized by the Business Federation of the Province of Maputo (ACIM) and the Mozambican Stock Exchange.