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Business Reporter

Chengetedzai Depository Company has been awarded an A-global central depository system (CDS) rating by Thomas Murray International, a leading global capital markets and financial credit rating and analytics company.

Part of the evaluation result for 2021 included a very low asset safety risk grading of AA and a very low counter-party risk rating of AA-.

The rating comes on the back of a CSD operating update for December 2021 seen by this publication indicating the cumulative number of accounts opened on Chengetedzai’s CSD as at December 2021 being 37 944.

Local investors accounted for 95 percent of all accounts opened.

“(Chengetedzai) CDC is embarking on an exercise that will see accounts opened in the CSD both individuals and corporates increasing significantly over the year 2022. We are really motivated by the rating,” the company said in a statement.

Following the licensing of a new CSD by the capital markets regulator, Securities and Exchange Commission of Zimbabwe (SecZim), some companies have migrated from the Chengetedzai CSD.

However, CDC, SecZim and other players are engaged in a legal battle where Chengetedzai is challenging the regulator’s directive on the migration process.

SecZim, after licensing the new CSD, issued the directive to ensure a smooth migration of deposited securities from one CSD to another.

According to a recent CSD trading update, the Zimbabwe Stock Exchange (ZSE) equities market capitalisation increased by 2,10 percent for the month of December 2021 closing at $1,317 trillion.

The total turnover for the month was $16,782 billion, representing an increase of 88,23 percent compared to the previous month.

The trading update shows that securities registered on the CSD accounted for 52,65 percent of total market capitalisation for dematerialised shares, and their total value was $ 693,443 billion as of 31 December 2021.

CDC said although individuals were the largest group in terms of the number of accounts at 43,99 percent, pension funds and corporate accounts hold the largest value on the CSD at 29,22 percent followed by insurance companies at 17,07 percent.

During the month under review, a total of 2 878 deposits were processed by CDC compared to 2 552 in November 2021, bringing the cumulative number of deposits since going live to 93 948.

However, account opening activity on its Central Securities Depository (CSD) decreased by 55-47 percent in December 2021 to 338 compared to 759 accounts opened in the previous month.

According to the update, the average dematerialisation penetration ratio (Demat Ratio) across all counters was at 52 percent as at December 31, 2021.

The Old Mutual ZSE Top10 Exchange Traded Fund (OMTT ETF) was the highest dematerialised counter at 100 percent followed by Proplastics and Meikles Limited at 99 percent and 98 percent respectively.

Dematerialisation is the process of converting the physical share certificates into electronic form, making it easy to maintain and access them from anywhere.

An investor who wants to convert his physical shares into digital form needs to open a demat account with a depository participant.

Meanwhile, CDC said that in 2021, the ZSE rallied strongly and the increase in trades was propelled by an increase in demand.

The CSD processed 6,708 trades valued at $33,56 billion during December 2021, with the cumulative figure in 2021 coming up to $129,52 billion.