US$7,81million worth of trades settled through VFEX depository

THE Securities and Exchange Commission of Zimbabwe (SecZim) has said a total of US$7,8 million worth of trades were settled through depository during the 2024 third quarter.

A depository is an organisation that holds securities in electronic form for investors and provides services related to securities transactions. Depositories are crucial to the functioning of financial markets and play a role in facilitating the transfer and settlement of securities transactions.

In its trade update for the period ended September 30, 2024, SecZim said corporates disposed of the highest value of shares worth US$6,25 million, which is 80 percent, followed by individuals which disposed of US$620 360, which is 7,95 percent worth of shares.

“For the quarter ended 30 September 2024, a total of US$7,81 million worth of trades were settled through VFex depository,” reads part of the update.
“Pension funds purchased 55,71 percent (US$4,35 million) of the total shares, followed by corporates which accounted for 33,62 percent (US$2,62 million).

Individual investors purchased 6,26 percent (US$488 502) of the total shares.”

Launched in October 2020, VFex is a subsidiary of the Zimbabwe Stock Exchange. It was established to kick start the Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in Victoria Falls.

It is part of efforts to attract global capital and restore foreign investor confidence in Zimbabwe’s capital markets and help companies raise capital in foreign currency.

Located in Matabeleland North, it is the only USD-denominated bourse in the country and region, placing the province at a vantage point to lead in financial technologies investment.

The fast-growing stock exchange has been offering various incentives that include Government’s increase in the retention ratio for exporters listed on the VFex to 100 percent, which has been an attractive factor for companies.

Zimbabwe Gold

The Commission said that during the period under review, a total of 24 732 investors had active accounts on both the C-Trade and ZSE direct.

They said these two platforms recorded buy trades worth ZWG5,25 million and sell trades worth ZWG6,12 million.

“In addition, VFex Direct recorded buy trades worth USD$22,097 and sell trades worth US$19,232 over the three-month period ended September 2024, with a total of 1 518 active investors,” said SecZim.

Meanwhile SecZim said the asset management industry recorded an aggregate operating profit of ZWG216,96 million for the quarter under review, with an average industry operating at a profit of ZWG7,48 million.

They said 22 out of 29 asset managers reported positive operating profits, while the remaining seven incurred losses.

“Earnings for the quarter were rated critical based on the operating cost-to management fees ratio, which stood at 24 230 percent (Q2 2024: 1,311 percent),” said SecZim.

“This indicates that, on average, operating costs were 243,3 times higher than the management fees generated by the asset management industry. Only eleven asset managers were able to register an operating cost-to-management fees ratio of less than one.” —chronicle