ZSE Direct transactions up 500 percent
THE value of transactions traded on the Zimbabwe Stock Exchange (ZSE) Direct platform has increased by 500 percent to around $30 million as of last month from $5 million in January this year.
The platform, which allows individuals in the country to participate on the ZSE through the digital platform, was launched in September last year.
In an interview on the sidelines of the just ended Zimbabwe International Trade Fair in Bulawayo, ZSE head of business development Mr Anymore Taruvinga said they were excited by the uptake of the ZSE Direct platform.
“We started the year at about $5 million as of January this year, it went up to about $15 million in April and now we are close to $30 million worth of transactions per month in August,” he said, adding that there has been a steady increase in the value of shares traded and the uptake of the product.
“But the significance is the trend, It’s going up, which we are quite happy about because it shows that people are getting more confidence and also more people are getting aware of that product (ZSE Direct) and we really wanted to achieve getting more retail investors participating.”
As more retail investors participate, Mr Taruvinga said this adds liquidity on the market.
“A liquid market can then attract even other companies that have not been listed because it becomes easier to raise capital for companies,” he said. Following the launch of the ZSE Direct, the stock exchange is working with different
institutions to increase access to the platform by retail investors.
Since the launch of the ZSE Direct, the platform has registered slightly above 4 000 active participants out of a possible 7 000 clients that were on the Central Securities Depository as of June last year.
When the country adopted the local currency, the ZSE lost quite a number of foreign investors on the market and a buffer of local investors is always needed to support the domestic capital markets.
“So, the ZSE Direct is just only open to Zimbabweans and it’s important to grow that investor base where your local investors can support your stock exchange. “Around 2013, foreign investors were actually dominating on our market and on average they were investing about 56 percent of all the trades on the market, which means the local investor component was only about 44 percent,” he said.
“When you lose more than half of that and you don’t have a buffer that can be catastrophic for a stock exchange.” — The Chronicle
