HARARE - A new application that enables the buying and selling of stock exchange shares has gone live in Zimbabwe, aiming to drum up participation of local traders who constitute less than 1% of investors on the Harare bourse.
Old Mutual, Delta Corporation and Econet Wireless had the highest trades on the Zimbabwe Stock Exchange amid growing interest from foreign investors. The new application, developed by Escrow Group, is seeking to change this narrative and have more local investors participating.
Foreign investors are using the Zimbabwe Stock Exchange to store value from money they are not able to remit out of the country which has long-standing forex and liquidity problems. Reports from Zimbabwe say AB InBev, which controls Zimbabwe’s Delta Corp is yet to receive as much as US$70 million in dividends from the Zimbabwean associate unit.
Although foreign investors are facing challenges getting their money out of Zimbabwe, capitalisation on the ZSE rose by 2.3 percent to close last week at $11.2 billion, with volumes traded for the week totalling 14.78 million shares.
Tafadzwa Chinamo, chief executive officer of the Securities Exchange Commission of Zimbabwe explained: "C-Trade provides access to trading on the Capital Markets to anyone with a Bank Account or mobile number/ mobile banking."
The new C Trade mobile platform will also tap into potential investors among diaspora Zimbabweans settled in other countries such as South Africa. There are about 7000 Zimbabweans that are currently trading on the ZSE.
Zimbabwean leader, Emerson Mnangagwa is on a crusade to bring back investments into Zimbabwe and has been engaging expat Zimbabweans in the diaspora to sink money into local projects as the country is now “open” for business.
Finance Minister, Patrick Chinamasa said Monday that that the new C Trade platform had the “ability to reach the grassroots, as well as for the diaspora to trade here at home using international payment platforms".
However, foreign based Zimbabwe investors have been having problems remitting their profits and dividends from the country. Nonetheless, government officials still view the capital markets in Zimbabwe as crucial and key to unlocking investment flows in the struggling economy.
"We cannot afford to ignore the role of the capital market in the role of economic development," Chinamasa, who attended the launch of C Trade in Harare together with Mnangagwa, added.
The platform is expected to ride on growing internet and mobile penetration in Zimbabwe, where mobile data accounts for about 98 percent of all internet usage in the country, according to stats from the Posts and Telecommunications Regulatory Authority of Zimbabwe.
However, during the first quarter of 2018, mobile network subscribers declined by 16% to around 11 million after state owned NetOne and Telecel lost 47 percent and 12 percent of their users respectively. The new ZSE trading mobile platform also uses the USSD platform for those that do not have smartphones that are able to access the internet.
Mnangagwa said the potential wide reach of the mobile application will enhance “participation from small business owners” on the ZSE. Zimbabwe’s economy is now mostly informal as formal businesses close shop while the country’s jobless have also ventured into informal trading.
- BUSINESS REPORT