MOBILE telecoms giant Econet Wireless has come out strongly against the Zimbabwe Stock Exchange’s (ZSE) failure to implement reforms aimed at modernising the exchange through the introduction of an electronic trading platform and a Central Securities Depository (CSD) in a bid to boost the relevance of its mobile money service EcoCash.
Econet this week released a strongly worded statement calling on the ZSE to shake off its elitist “old boys’ club” image and urgently reform the share trading system of the ZSE as the current system is subject to abuse.
“It is time for the ZSE to become more accessible to ordinary people, and a proper vehicle for mobilising capital for companies,” read the statement.
In an effort to speed up the process, Econet said it was willing to extend a “no strings attached loan” to the ZSE to buy an electronic trading platform that allows immediate and transparent settlement as in other countries such as South Africa and Kenya.
Analysts attribute Econet’s rising interest in the ZSE to its recent foray into mobile money transfer. Offering small investors an efficient payments platform would enable broader participation and liquidity of the ZSE.
Econet has also announced plans to split its shares in a 10 for one share split aimed at boosting the number of listed shares. The move is seen by analysts as aimed at attracting smaller investors to its register. At US$6 per share, Econet had become the dearest share on the ZSE.
Last week Econet said it was setting up a payment system for shares on the ZSE using its EcoCash service. The system is designed to make it possible for small investors to buy and sell shares using EcoCash.
The group also announced its ambitions to set up an electronic trading platform which will also make share trading much more transparent.
However, Econet Wireless Services CEO Darlington Mandivenga did not say when the platform would be ready, but confirmed discussions with brokers and securities authorities would start once the system is up and running.
He said Econet would not set up a brokerage firm to deal with its new service.
“We are just providing a payment solution, which we expect the brokers and public to use,” said Mandivenga. “They will all make money from it,” he said.
However, the CSD has to be operational first before Econet can set up its payment system.
Indications from sources closely associated with the implementation of Zimbabwe’s CSD system said the system could be operational by mid-year, but dependent on certain conditions precedent, particularly the regulatory and legal framework.