THE Securities and Exchange Commission of Zimbabwe (SecZim) says retail investors trading on the Zimbabwe Stock Exchange (ZSE) through the C-Trade platform now account for more than half of trades happening on the local stock exchanges.
C-Trade, designed to make capital markets more accessible, is an electronic platform for buying and selling of financial instruments such as stocks and bonds using mobile phones or laptops. The platform automatically gives brokers access to significant online investment traffic.
“The retail investors have really come to the party, C-Trade now accounts for more than half of trades happening on the stock exchanges and this is largely a result of reaching the public through investor education,” Tafadzwa Chinamo, the SecZim chief executive said at the Commissions annual general meeting.
Chinamo said the platform, introduced in 2018 amid increased use of digital technologies and the associated lower costs of data, made C-Trade inevitably ideal in expanding securities market investments to a larger spectrum of the financially excluded population.
“Given a high mobile penetration rate of 90 percent in the country, C-Trade has indeed taken advantage of this low hanging fruit by riding on the back of the wide use of mobile phones nationwide,” he said.
According to the SecZim chief executive, the number of active investors on the stock exchanges was 13,165 in 2020 and is targeted to reach 15 789 in 2021.
“However, as at June 2021, it turns out that we were quite conservative in our target because at half year, we are now at 33 000 as at June 31, 2021,” said Chinamo.
He noted that the number of active investors on the stock exchanges is people who have actually opened an account and are actively trading.
Chinamo said the number of active investors not directly trading through stock exchanges, but going through asset managers or through unit trusts were targeted at 50 000 in 2020 and 62 500 in 2021.
“However, as at June 2021, we were looking at 60 000 and we are ahead of our targets and by year end we will be able to achieve those numbers,” he said.
Chinamo said that if the commission fulfils its mandate and becomes the regulator that it is envisaged to become, people will have confidence in participating in the capital markets.
“In terms of performance framework, we are checking a number of market securities intermediaries and in 2020, there were 102, and the target this year is 107 and we are currently at 115 as of half year.
Chinamo said daily market stock turnover, which is how much money is exchanging hands in stock exchange markets, in 2020 averaged US$1 million and the target for this year was US$1,2 million.
“For this year we believe there is going to be more activity, partly because of the engagements we are going to roll out, we are looking at increasing it to US$1,2 million, but currently, we are sitting at US$1,3 and we are ahead of target,” he said.
Chinamo also noted that the Victoria Falls Stock Exchange (VFEX) will in the short term introduce new products which are more retail oriented in order to attract more local investors.
The VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE), launched late last year as part of efforts to attract global capital, while also helping restore foreign investor confidence in Zimbabwe’s capital markets and help companies raise capital in foreign currency.
Chinamo said the US$ denominated exchange should attract any ordinary person in Zimbabwe with free funds.