Biti’s move to cut taxes on securities was meant to stimulate demand for shares and generally encourage investment. At the time, Zimbabwe brokerage fees and levies were relatively high compared to regional markets.
But 2010 has turned out to be another all-too-familiar year for stockbrokers, at least for now — the fees and levies have not changed.
This is because government is still to gazette the necessary statutory instrument to effect the changes.
Stockbrokers are worried over government’s slow implementation.
Investors on the other hand are waiting impatiently to reap more value on their investments.
Stockbrokers also believe demand for shares will be stronger once government gazettes the instrument.
Zimbabwe Stock Exchange (ZSE) chief Emmanuel Munyukwi this week confirmed that the exchange is awaiting direction from a statutory instrument to effect the new levies.
He said: “We are waiting for the statutory instruments to effect the changes. Until then, we will be using the old charges.”
Biti reviewed the cost of trading on the ZSE which, at 7,5%, was considered relatively high compared to the rest of the region.
The minister lowered the fees for all transactions — buyers and sellers — to just over 3% and analysts say this will significantly boost activity on the bourse in the New Year.
A Securities Commission (SEC) circular to stockbrokers on levies and fees reads: “We are aware that there is some confusion with regards to brokerage fees and levies due to the absence of a Statutory Instrument. We apologise for the delay of printing of the statutory instrument.”
While government and SEC are apologetic, prospective investors are possibly being put off at the moment, costing the market liquidity.
And naturally brokers will not be smiling that much in the face of such a development.
Apart from the many apologies, the equities regulator is also making promises the instrument would be “available and effective on 11 January”.
“We would like to confirm that the fees and levies have been confirmed and agreed upon with the Ministry of Finance and the Statutory Instrument has been sent for printing,” said the commission.
An analyst says that there will be renewed interest and benefits for all stakeholders including the government through its taxman should the new instrument become effective.
Foreign funds have also found a new hunting ground on the market after political rivals, Prime Minister Morgan Tsvangirai and President Robert Mugabe, formed a unity government almost a year ago.
“(This renewed) interest should result in an increase in market turnover with consequent (benefits) for all stakeholders including the Government.
“Hitherto, the equities market had been left illiquid as it had become too expensive to (trade),” an investment advisor said.