Swaziland bourse has long way to go
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In a financial world of instantaneous transactions, when billions of stock shares worth millions of rand are traded at the speed of light, the sleepy Swaziland Stock Exchange (SSX) remains a throwback to an earlier era.
During the first quarter of 2013, R68 000 worth of stock was traded. The country’s two stock brokerage houses meet at noon daily, but only if a transaction is under way.
Visitors will not find an electronic ticker flashing the activity of the bourse’s six listed companies.
“We still do things manually,” Peace Mabuza, the research and development officer for the SSX, said. Anyone at the trading sessions who has legible handwriting records trades with marking pen on a plastic display board. Total capitalisation as of Thursday was slightly over R2 billion.
Trade is conducted by Swaziland’s two brokerage firms, African Alliance Swaziland Securities Limited (AASSL) and Swaziland Stockbrokers Limited (SSL).
Finding shares to trade is a major challenge for investors.
“Liquidity is an issue. Our secondary markets – trade of already issued stock – is very lacklustre. There is not much trading going on,” Mabuza said.
For years, stock trading was hobbled by the absence of laws to regulate financial markets in Swaziland. The SSX was founded in 2000 and, for a decade, the bourse operated in an unregulated netherworld under the supervision of the Central Bank of Swaziland, where trading was conducted in a conference room of a bank annex building.
In 2010, a law was passed by Swaziland’s parliament to create a Financial Services and Regulatory Authority, and a companion piece of legislation, the Securities Act of 2010, was passed to oversee the operations of the SSX.
Free of direct central bank oversight, the bourse set up operations elsewhere in downtown Mbabane, bringing along the marking pens and display board for trading purposes.
From a total number of seven listed equity companies at the launch of the SSX in 2000, six firms currently trade shares. Investment holding company Greystone Partners, incorporated in 2009, joins Nedbank Swaziland at the bourse, along with Swaziland Empowerment and two property holding companies, Swazi Properties Investment (Swaprop) and Swazispa Holdings.
More than half of the SSX’s capitalisation comes from the sugar company.
The regulatory laws have not increased stock trading because in Swaziland’s small economy there is little to trade.
Swazis interested in creating or expanding stock portfolios are advised to trade at the JSE. Shares of Swaziland’s most profitable company, MTN-Swaziland, are traded in Johannesburg. SSX-traded stocks are rare commodities. Owners of company shares rarely make them available for purchase.
In the first quarter of 2013, a total of 4 000 shares were traded in two deals, resulting in a turnover of R67 800. However, the largest deal in years was concluded in April, when 50 000 shares of Swaziland Empowerment traded hands in a transaction worth R1.1 million.
The SSX’s overall performance must bring a smile to traders in other countries who are made dizzy by the vertigo-inducing swings of their own stock exchanges. The SSX all share price index stood at 289.42 points on Thursday, unchanged from Monday.
“You know the saying: ‘There’s no hurry in Swaziland’. Why should the stock exchange here be any different?” a trader said.