The move by the Securities and Exchange Commission (SECZ) to broaden the capital markets by introducing a mobile share trading platform should come into fruition in the second quarter.
SECZ chief executive officer Tafadzwa Chinamo told Business Weekly that the mobile, online trading platform project is in its final stages of completion.
“Once complete investors will be able to access both the Zimbabwe Stock Exchange and the Financial Securities Exchange (Finsec) trading platforms via their mobile gadgets and the internet,” he said.
“The system will allow mobile trading of both bonds and shares. The market will be advised of the developments with regards to the launch date but the target is to have a launch by the second quarter 2018.”
The technical partner for the mobile share trading platform is Escrow Systems, a unit of the Escrow Group that provided the technical solution for the mobile traded retail bond in Kenya last year.
In respect of the trading of bonds, Chinamo said the ZSE and Finsec have systems in place that list and trade bonds.
“Debt listing rules have since been gazetted and paved way for the listing of bonds. To date, ZSE has listed one bond (Getbucks) and Finsec has also three Debt listings: IDBZ tranches 1 and 2, and the UNTU U-Gain Bond,” he said.
The whole crux of the new trading platforms is meant to broaden capital market(s) participation, and the significant gains posted by the local bourse last year will be a further incentive to those interested in playing the stock market.
An analysis of the stats show that 2017 saw quarterly increases in flows into equities.
The second and third quarter of last year realised 48 percent and 87 percent growth in turnover, respectively, leading the Zimbabwe Stock Exchange’s mainstream index closing the third quarter at 418.39 points up from the 145.27 level at the beginning of the year, a 188, 01 percent leap.
As at the end of November the mainstream index had hit an all-time high of 534.13, with $451,71 million having been fed into equities.
Although it is standard to assume that the size of a nation’s capital markets is directly proportional to the size of its economy, the SECZ boss says the depressed state of the economy over the past few years has had its toll on the local stock market.
“In the Zimbabwean scenario, it is in fact the depressed economic performance that has contributed to the general under-performance of the local capital markets.
“With low capacity utilisation, company closures, high unemployment and economic fundamentals pointing southwards and low disposable income brought about by poor economic performance, the local capital market has found it difficult to mobilise savings from the public and channel them to the country’s productive sector, hence lack of provision of long-term capital.
“This has also led to thin trading and low level of liquidity. It is also crucial to note that stock prices are not solely driven by economic fundamentals but by a function of other non-economic factors such as emotions, cognitive psychology and expectations,” said Chinamo.
To this extent, the up-tick of local capital market can be expected to be high as the economy goes on an upward trajectory.