THE Zimbabwe Stock Exchange is contemplating fixing the minimum capital for listed companies at US$1 million, which could see five firms being delisted. The listing committee discussed the matter on Monday and proposed that minimum value for listed firms be set at US$1 million, the first review since dollarisation, said sources close to the meeting.

"This was the case before dollarisation. In other markets, we see companies with values below certain thresholds being relegated to smaller exchanges. The listing committee will engage companies on this development," said a source who was in the meeting.

Certain approvals have to be sought from regulators, with the possibility of "slight" amendments to the current listing requirements. ZSE chief executive Mr Emmanuel Munyukwi was not immediately available for comment.

Companies likely to be delisted include Zeco Holdings, with a market value of about US$46 000 as of last Monday; Steelnet, currently under judicial management; Apex Corporation, Celsys and Gulliver.

But this could be an opportunity for the establishment of a secondary exchange for firms that fail to meet the new requirement.

"The review is likely to see some companies losing their ZSE listing status and this will obviously put pressure on management to deliver acceptable turnaround strategies," said an analyst with Imara Securities.

"But without an alternative stock exchange, it means they cease to be public-listed entities. But if we had a secondary stock exchange, then these companies would simply be relegated to secondary exchange."

The ZSE last traded in Zimdollars in November 2008 and resumed trade in February 2009 soon after the formation of the inclusive Government following a three-month suspension in trading. The suspension was at the instruction of the Reserve Bank of Zimbabwe, which alleged that some traders were using fraudulent cheques to buy stocks.