ZIMBABWE Stock Exchange (ZSE) has struck a deal with three local banks to act as clearing houses to expedite settlements after trading of stocks.
The banks are CBZ Bank, Stanbic and Kingdom Bank.
Ideally stockbrokers wanted the local bourse to work with one bank as moving money from one bank to another was costly on their part due to â€œvery highâ€ charges.
ZSE chief executive Emmanuel Munyukwi told BusinessDigest on Tuesday that an agreement with traders, local banks and the ZSE was reached last week.
â€œWe have agreed to settle payments through a T+7 method, meaning traders would be paid seven days after each trade,â€ Munyukwi said.
However, he could not reveal the names of banks working clearing houses.
But Businessdigest has it on good authority that ZSE had stuck a deal with CBZ, Stanbic and Kingdom.
Stockbrokers this week said the stock exchange had not formally announced the arrangements because the banks had not started their operations.
â€œIt would be mandatory for all stockbrokers, despite not having foreign accounts with the banks, to open one,â€ Munyukwi said.
Before the stock market started trading in foreign currency, Stanbic Bank acted as the clearing house.
The local bourse last month reverted to the T+7 settlement method barely a week after resuming trade from the T+3, meaning that payment would be done seven days after each trade.
The local bourse had resorted to the T+3 after investors complained that the T+7 was not making the stock exchange the preferred investment vehicle because of rising inflation.
Â â€œIt might be an inconvenience but thatâ€™s the best method we have come up with,â€ said.
The ZSE traded upbeat this week on the back of strong gains in heavyweight counters after monetary authorities restored the fungibility of all dual listed counters.
Analyst said they expect dual-listed counters to re-price their share prices in Johannesburg and London. This should give short-term upward momentum to the local bourse.
The cost of transaction on the local bourse, which is higher than elsewhere in the region, is expected to fall following the removal of surrender requirements.
Foreign currency investments are however likely to remain elusive in the short term as investors test the credibility of government.
Meanwhile, banks are experiencing low deposits from clients who feel that their foreign currency accounts might be raided by the Reserve Bank of Zimbabwe.
Bankers Association of Zimbabwe president, John Mangudya said the â€œroutine raids of the pastâ€ were unlikely to recur.
â€œAlthough in my view the raids that started in November 2007 might not recur the new Finance minister (Tendai Biti) has to constantly reassure depositors that the era of random raids on FCAs was over,â€ Mangudya said. â€œFor the betterment of Zimbabweâ€™s economy we encourage people to make deposits to ensure that money circulates within the formal sector.â€
Economist Eric Bloch said confidence was low among depositors particularly on depositors whose accounts where raided last year.
On reports that depositors have to endure a long period for money transfers to come though from one FCA to the other, Mangudya said: â€œNormally it takes three days for transaction to be concluded, and that is international practice.â€
He said there is what is termed a â€œcorrespondent bank that functions in a triangular wayâ€.
Once a commercial bank in Zimbabwe gets a money transfer instruction from its client it sends a message to New York where it has an account to deposit money to another bank account in Zimbabwe, Mangudya said.
Under the recently launched Short Term Emergency Programme commercial banks are encouraged to expedite payment mechanisms for the new monetary environment.
â€œCustomers with FCAs need to be able to pay for goods and services with debit cards and should be able to withdraw South African rands or United States dollar notes from ATM machines,â€ reads the document.