A new upgraded Debt Module system, which caters for various security types both Government and corporate, is set to go live today on the Zimbabwe Stock Exchange.
Acting chief executive Martin Matanda said the ZSE has worked with the Automated Trading System supplier (Infotech) in the enhancement of the Debt Module within the system. The exchanged re-launched the fixed income market last year after a two-decade hiatus but it faced challenges mainly due to its compatibility with the central depository system.
However, the exchange is confident that the new upgraded system will be user friendly.
"The system capability has been increased to cater for various security types (Government and corporate), various day count conventions, both yield and percentage of par pricing mechanisms and various reporting and configuration improvements. The upgraded system has already been availed to ZSE members for user acceptance testing and full implementation is on course to take place at the end of this month."
Mr Matanda said the exchange had been working closely with Chengetedzai Depository Company (CDC) to ensure that the seamless integration between their system and the ZSE ATS is maintained. Mr Matanda added that the enhancements will cater for all government securities (both discount and interest bearing).
Government securities are however held on a separate depository operated by the Reserve Bank of Zimbabwe.
"Government committed to listing its securities on the ZSE in 2015 and the focus is now on implementation. We know that international institutional investors have appetite for Government securities but the attractiveness of these instruments will be enhanced if there exists a more transparent secondary market."
The ZSE acknowledged that there was subdued activity on the debt market at present with just a sole listing; the GetBucks Medium Term note, which listed in May last year but is yet to register a single trade.
"The sole listing on the ZSE is a Medium Term Note that is still to register a single trade since listing. We observe that there appears to be a similar pattern on the alternative trading platform where there three debt market listings but are unable to proffer reasons on the latter. However, from our experiences, the activity on the debt market is not purely an indication of the external appetite but also depends on the holders of the securities themselves, who may simply want to hold the securities to maturity."
The alternative trading platform (Financial Securities Exchange) has three bond listings; Untu MTN series, IDBZ bond series 1 and 2.
Analysts say that the lack of activity largely reflected how people view long term investments in Zimbabwe and the general lack of a price basis while there are others who cite the lack of publicity and lack of education in the trading of bonds as some of the reasons that the market has failed to attract investors. Mr Matanda said the ZSE would improve the visibility of the investment opportunities through channels such as those offered by Bloomberg and Thompson Reuters.
"To that end discussions have been initiated with the relevant stakeholders and further announcements will be made in due course."