CSD on-boarding debt securities to increase

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Discounted market capitalisations are prevailing on the Zimbabwe Stock Exchange.

THE total number of accounts on the Chengetedzai Securities Depository (CSD) increased to 23 269 in February with the on-boarding of debt securities expected to pick up this year as the country’s economy starts showing signs of stability and improvement.

By Melody Chikono

Local and foreign investors opened 276 new CSD accounts last month.

Of this figure, local investors account for 94% of the CSD accounts while individual investors accounted for 54% of the new accounts opened in February.

In a monthly update for February, CSD chief executive Campbell Musiwa said the Zimbabwe Stock Exchange (ZSE) completed the upgrading of the Automated Trading System (ATS) debt market module, which is expected to usher in a robust trading platform for bonds and other debt instruments.

During the period, the average de-materialisation penetration ratio (demat ratio) across all counters remained at 39% as at February 28 with three counters having now achieved demat ratios of at least 90%, while all counters in the top 25 have a ratio that is above 40%.

Meanwhile, the cumulative number of securities deposits processed since going live in 2014 is now 56 846 after CDC processed 1 221 securities deposits in February.

On clearing of settlements of trades, Musiwa said trading activity on the ZSE equities market remains high with the market achieving a turnover figure of US$66,1 million for February.

This is a 91% increase in the month compared to the January figure of US$34,7 million.

CSD received and processed 2 491 ZSE trades in the month of February bringing the total number of trade processed in 2018 now to 2 868.

The ZSE market capitalisation declined marginally by 3% to US$8,3 billion as at February 28 compared to US$8,6 billion as at January 31.

The market was weighed down by losses in heavyweight counters such as Delta Corporation Limited and Econet Wireless Zimbabwe Limited.

The market value of the securities placed on the CSD dropped 2,45% to US$3,950 billion as at February 28 from US$4,045 billion as at January 31.

CSD expects to bring on-board its second Business Partner this month. The second Business Partner will become the first self-administered pension fund to become a Business Partner on the CSD. The CSD Business Partner product is targeted at self-administered pension funds and other qualifying organisations.

CSD Business Partners can connect directly to the CSD without using another Participant such as a stockbroker or Custodian.

The intention is to reduce the number of organisations in the CSD value chain and allow Business Partners to access the CSD services at a lower cost compared to when they use another Participant.