Chengetedzai in drive to demat physical shares

Chengetedzai Depository Company is embarking on a dematerialisation campaign to increase the ratio for individual and institutional investors that still hold shares in physical form in 2022.

This comes as a number of companies still hold their shares in physical form over the years.

Dematerialisation (demat) involves the conversion of those shares into electronic form and during the month of April 2022, the average dematerialisation penetration ratio across all counters was 52 percent.

Chengetedzai said in an update for April that a total of 123 deposits were processed bringing the cumulative number of deposits since going live to 100 235.

“CDC CSD is embarking on a demat campaign to increase the demat ratio in 2022 for individual and institutional investors that still hold shares in physical form. The average Dematerialisation penetration ratio (Demat Ratio) across all counters was at 52,22 percent as of 30 April 2022.

“The investor type that holds the most significant value on CDC CSD is corporate, and pension funds account for 32,21 percent and 21,67 percent,” CDC said During the period market value statistics for securities registered on the CDC Chengetedzai Securities Depository (CSD) accounted for 40,94 percent of total market capitalization for dematerialized shares at a total value of $1,4 billion.

CDC said this was expected to increase with new listings in due course. The Zimbabwe Stock Exchange (ZSE) equities market capitalization increased by 80 percent for April 2022, closing at $3,547 trillion.

“The total turnover for trades on the Zimbabwe Stock Exchange settling through Chengetedzai’s CSD was $8,291 billion for the month under review. On account opening, CDC CSD opened 601 new accounts in April 2022, resulting in 2 425 accounts being opened this year.” CDC said

This saw the cumulative number of accounts opened on the CDC CSD as of 30 April 2022 increasing to 40 408 with local investors accounting for 94,92 percent.

Foreign investors accounted for 5,08 percent of all accounts opened on the CDC CSD during the period.-eBusiness Weekly