22 January 2018

Zimbabwe: Chengetedzai Handles U.S.$2 Billion On ZSE

Chengetedzai Securities Depository (CSD) has processed in excess of 35 000 Zimbabwe Stock Exchange (ZSE) trades valued at US$2,1 billion since going live with 22 000 accounts having been opened as at December 31 2017.

Chengetedzai facilitates the clearing, settlement and safekeeping of securities which include equities, money market instruments, bonds and mortgage-backed securities and derivatives.

It also caters for the transfer of securities between beneficial owners via a book entry and for the settlement of cash following transactions on organised exchanges such as the ZSE CSD CE Campbell Musiwa told businessdigest that while 94% of the accounts were opened by locals, the rest was done by foreigners.

"As at 31 December 2017, there were 22 387 accounts on the CSD. 94% of the accounts were opened by local investors with the remaining 6% being opened by foreigners. Since going live, the CSD has processed 35 315 ZSE trades with a value of US$2,1 billion," he said.

Musiwa said low trading volumes have affected revenues of all capital market players while foreign currency shortages and challenges in repatriating proceeds for foreign investors have remained.

"This has led to reduced participation by foreign investors amongst other challenges. There is also low visibility and awareness on the operations of the CSD which means the market still needs to be educated," he said.

While Zimbabwe has a fairly developed securities market, Musiwa said there is need for further automation and straight through processing (STP) between market participants in order to improve market efficiency.

He also noted the need for improved market access and financial inclusion, especially for retail investors with products such as mobile or online trading platforms being said to go a long way in this regard.

He also said there is need to increase the number of securities types that are listed on the country's exchanges.

"The market is currently dominated by equities, and other products such as bonds, derivatives, securities lending and borrowing are required," he said.

In August 2014, the CSD commenced dematerialisation of three pioneer counters and subsequently went live in September 2014. The on-boarding of further counters was done on a phased approach basis in order to avoid a gridlock as had been experienced in other countries.

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