By Piggy’s Trading & Investing Tips
Piggy has noted some exciting news that the Zimbabwe Stock Exchange (ZSE) is working on several initiatives to further increase retail participation on the bourse.
There has been a lot of retail interest, particularly on the newly launched Exchange Traded Fund (ETF) which has grown by over 200% in the last six months.
The Old Mutual ZSE Top Ten Exchange Traded Fund (ETF) was launched in January 2021 and has helped diversify product offerings on the exchange. In addition, the introduction of the ZSE Direct platform has made investing and trading easier for the retail market.
Another development on Zimbabwe capital markets has been the introduction of C-Trade, a platform that enables anyone from anywhere to buy and sell shares on the Zimbabwe Stock Exchange (ZSE) and Financial Securities Exchange (FINSEC).
The C-trade platform, just like ZSE Direct gives Zimbabweans in the diaspora a chance to invest in shares with enhanced simplicity.
These platforms are in line with global trends given that it makes use of the internet and cell-phone technology, which in turn opens the markets to retail investors.
Piggy has been recommending folks to take advantage of opportunities in the market by buying into undervalued assets.
However, this also requires one to have good advisors that work in the best interest of clients.
So, how can one identify the right stockbroker?
Here is what to look out for:
- Professional advice. There is need to look out for a brokerage that provides excellent recommendations that are unbiased and geared towards the best interests of the client;
- Quality service. The quality of service for both large and small account holders should be the same. In other words, both types of customers should get red carpet treatment. Further, brokers should take time understanding an investor’s risk-tolerance level;
- Help with calculating your taxes. As a value-added service, brokers should assist in determining the amount of taxes owed by the investor;
- First choice in Initial Public Offerings (IPOs). Good brokerages should always inform their customers about new initial public offerings (IPOs) so that customers can get in on the ground floor (the first stage) of a potential investment opportunity;
- Access to other investment options. Some investors may also need help managing other assets and investments in private companies or partnerships
- A little peace of mind. Brokers are paid to watch for changes in the market so that investors do not have to;
- Brick & Mortar offices. Some investors may still need to visit their brokers face to face to feel comfortable. This can also encourage investor trust; and
- Innovation. The world is changing, and technological trends are evolving. Good brokerages are consistently re-inventing new ways of interacting with clients while improving customer service. Piggy recommends brokerages that offer high quality research services through economic and market intelligence reports, results review notes as well as company specific research reports. Other products include industry reports, thematic research reports, macro-economic and equity strategy reports.
Overall, retail investors should ensure that their trading and investing decisions are guided by analyst views and research.
The investment analyst role involves determining how an investment is likely to perform and how suitable it is for a particular investor.
Key factors in investment analysis include the appropriate entry price, the expected time horizon for holding an investment, and the role the investment will play in the portfolio.
In conducting an investment analysis of a listed company, for example, equity analysts look at how the company performed over time compared to its benchmark and to its main competitors.
Peer comparisons would also include investigating the differences in performance, ratios, and valuation.
Brokers that invest in solid research departments are therefore well placed to assist retail investors navigate through the markets.
- Learn more about investing and trading by downloading the SECZIM Investment 101 Handbook from www.piggybankadvisor.com.
- Matsika is the head of research at Morgan & Co and founder of piggybankadvisor.com. +263 78 358 4745 or email@example.com / firstname.lastname@example.org.