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Mobile share trading by October

THE Securities and Exchange Commission of Zimbabwe (SECZ) is planning to introduce mobile share trading by October this year, in a move that could open the capital markets to broader participation. Tafadzwa Chinamo, the chief executive officer of SECZ, disclosed to this newspaper last week that the commission wants investors to start trading shares, from their mobile phones and the internet on both the Zimbabwe Stock Exchange (ZSE) and the Financial Securities Exchange (Finsec), which was licenced last year in September by SECZ as an exchange meant to broaden capital market participation. Old Mutual Zimbabwe, which is the only company on Finsec, listed $68 million worth of B-Class shares which were issued under the indigenisation programme. Escrow Systems, a unit of the Escrow Group which provided the technical solution for the recently launched mobile traded retail bond in Kenya, will spearhead this innovative online and mobile securities trading. A spokesman for Escrow said the solution was being offered on a revenue-sharing basis with the users and that there would “be minimal to no capital costs to the market participants”. “Escrow Systems will deploy the entire solution and provide the necessary user-acceptance-testing and training at no cost to the users. Our income will come from revenue sharing with the market participants,” said Eliah Sarayi, head of sales and marketing for Escrow Group. He said the system would not circumvent stockbrokers who remained an integral part of securities trading. “The stockbroker is still an integral participant on the capital markets. In that regard, all trades will be harnessed from web, mobile via USSD and an Android App through the stockbroker order management system on to the country’s stock exchanges,” said Sarayi. USSD, an acronym for Unstructured Supplementary Service Data, is a protocol used by GSM cellular telephones to communicate with a service provider’s computers. Escrow provided the technical solution to the government of Kenya working with Central Depository and Settlement Corporation (CDSC), the central bank, the Nairobi Securities Exchange and mobile network operators in the recently launched mobile traded retail bond, dubbed M-Akiba. The retail bond, the first of its kind in the world, was a resounding success and Sarayi said “the Escrow technology was a key factor”. “There are indeed similarities with the proposed project here in Zimbabwe and these similarities emanate from the fact that in both instances, we are making use of mobile technology to extend capital markets transacting to the general populace. It is our view that disruptive solutions such as what we have launched in Kenya and what we are working on introducing here in Zimbabwe is the way to proceed if Africa is to take its rightful position in the global world,” he said. In preparation for the launch of internet and mobile share trading, Chinamo, told theFinancial Gazette that SECZ would roll out a campaign to educate existing and potential investors on the trading tool. “Towards the end of this year, I think around October, we want to introduce internet and mobile trading of shares. We want to enable everyone, local or foreign investors, to bring the exchanges to within touching distance. Through this coming campaign, we want to educate and inform people about investment and reach out to them on how to use the internet and mobile trading of shares. What we don’t want to do is to introduce this powerful trading tool or engine when people don’t understand the capital market,” said Chinamo. He indicated that the commission was worried by the “disengagement in the capital market” since dollarization of the economy in 2009, which analysts said was due to a liquidity crisis and availability of alternative platforms to hedge their investments or savings. “We are really very excited about this development. As you are aware, our capital market is not in good shape. What worries us is that there has been a lot of disengagements in the capital market. It became very noticeable that the stock market was no longer in people’s minds,” said Chinamo. He indicated that the stock markets were now “failing to fulfil the role that they are supposed to play, which is to raise capital for individuals and companies” because of the lack of interest in share trading. “Up until recently, the trades on the market were very small. “As a result of that, we have seen a number of de-listings from the ZSE, so we said to ourselves that as much as we appreciate the challenges in the economy, we must also do something to reposition ourselves because we need the exchange and the people need the exchange,” he said. Chinamo said they wanted people to have an understanding of what capital markets were about. “We said lets go back to basics and start to make people understand what investment is all about. What are the risks in all this, how people should decide what to invest in. We want people to understand the capital market. As much as there were scandals before dollarisation, where many investors lost money, the capital market is not as treacherous as many people would want to think.” The ZSE, once a go-to destination for companies seeking cheap funding, has been experiencing declining investor interest with a significant number of counters delisting from the local stock market. About 17 counters have de-listed from the ZSE since 2009, when the country adopted a hard currency economy to deal with hyperinflation. Of the 17 firms that have de-listed since the country adopted a hard currency regime, nine did so voluntarily, while eight were forced to do so after they became insolvent. Counters that exited the local bourse include Astra Holdings, Apex, Gulliver, Trust Holdings, Cairns Foods, David Whitehead, Barbican Holdings, Steelnet, Interfresh, Celsys , Pelhams , Lifestyle Holdings and Radar Holdings. More are expected to delist this year after retail and hotel group, Meikles, Colcom and Dawn Properties warned that there were contemplating their future on the bourse. Four counters listed in the past three years, namely Proplastics, Getbucks, Simbisa and Axia. While Proplastic, Simbisa and Axia listed through a dividend-in-specie after being unbundled from their parent firms, Getbucks listed through an initial public offer in January last year. Chinamo said he was optimistic that the new model would impact positively on the capital markets. “Yes, there are challenges because our market is not trading much and the economy itself is not performing at full throttle. “Most companies are not performing well. People are afraid of things they should not be afraid of. People are still afraid of the old models and are saying the securities markets have too many risks. “Now, we want to introduce internet and mobile trading on our exchanges. “To prepare people for that, we have committed about $300 000 to start a campaign but we can increase that if need be. It’s a campaign to address challenges in the capital market. “People should know what the exchanges are all about. Ultimately, we want the amount of money going onto our stock exchanges to increase because exchanges are about mobilising money. “We understand why people are afraid of our stock exchanges so the first step is to simplify trading. We want it to be very easy for people to trade on the securities market.” Sarayi said mobile securities trading is delivered through multi-channels and was easily accessible to both basic and smartphone mobile users. “The mobile platform can be accessed by mobile subscribers via USSD, mobile App, or web and allows the subscribers to register and bid for securities using their mobile phones. So, any phone owner will be able to trade,” he said. Source:

  Wed Jul 2017