Harare — THE Zimbabwe Stock Exchange has clashed with the Securities Commission over the remittance of about US$2,3 million collected from investors by stockbrokers since May this year.

The commission instructed buyers and sellers of shares on the ZSE be levied 0,5 percent as investor protection levy for every transaction, a move that many brokers said was making the domestic market the most expensive in the world.

SEC, which regulates the ZSE had on Wednesday advised stockbrokers to remit the funds collected so far.

According to figures from the ZSE, US$236 million poured into the local bourse since May this year.

But ZSE chief executive Mr Emmanuel Munyukwi raised the stop sign, directing stockbrokers to continue collecting the levy but "not to remit" the funds.

He said that the ZSE had raised concerns with the commission and the matter was yet to be resolved.

"We advise that the committee of the Zimbabwe Stock Exchange disputes the legitimacy of the investor protection levy which was gazetted under Statutory Instrument 206 of 2009," said Mr Munyukwi.

"The committee of the Zimbabwe Stock Exchange has directed that all members continue to collect the levy but not to remit the funds to SEC until the matter has been resolved."

The ZSE boss added that there was no provision in the Securities Act for an investor protection levy to be paid by "anyone."

A comparison with the Johannesburg Stock Exchange shows investors were being charged huge fees here in Zimbabwe.

Stock buyers and sellers on the JSE are levied only 0,0002 percent.

"This really makes the market the most expensive in the world," said one dealer.

Over and above the 0,5 percent levy, stockbrokers are also charged transaction fees of 2 percent.

No comment could be obtained from SEC by the time of going to press.

Meanwhile, the stock market has continued rising, although marginally, ignoring some uncertainties on the political front following the partial pull out from the inclusive Government of the MDC formation led by Prime Minister Morgan Tsvangirai last Thursday.

After closing the week firm, stocks remained solid, with investors switching from lightweight counters to blue chip concerns such as Old Mutual.

The benchmark index has remained on an upward trend, rising in the range of 0,14 percent and 1,32 percent since the decision was made.

"The market did not respond much to these political developments. To a larger extent, the trades were mixed but the market was generally up since the decision was made," said one analyst.

However, there are growing concerns that delays in finding a solution to the political developments could trigger a massive investor flight.

Mr Munyukwi said some brokers had indicated that some of their foreign clients had cancelled orders.

"At the moment, the impact is on new orders. Some brokers have told me that some of their foreign clients have put on hold their orders," he said.

A Harare-based research firm Interfin said the recent developments on the political front might have an adverse impact on the local market.

"The pulling out of one of the political parties has paralysed the operations of the Government and it's likely to be felt in the broad direction of the economy.

"Even though we don't expect the crisis levels of last year, confidence in the economy is likely to be dented. This has the effect of accentuating the tension that exists between the two main political parties especially at such a period when investor confidence from both local and foreign investment needs to be fostered," said Interfin.

The Prime Minister announced that his party was disengaging from the Government to press for the resolution of outstanding issues in the GPA and in protest over the incarceration of its treasurer Roy Bennett.

Funds from foreign investors have been steadily pouring into the country's stock market since the ZSE resumed trading in US dollars on February 19.

Both industrial and mining indices were reset to 100. The key index has jumped 73 percent to 170, having set record for the most of October.

The mining index rose 134 percent to 250 but now appears to have levelled. The ZSE market is now worth US$4, 6 billion.