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Mr Chinamo

Business Reporter
THE Securities and Exchange Commission of Zimbabwe says the Investor Protection Fund, at current levels, is sufficient to cover any risks to investors on the Zimbabwe Stock Exchange.

This comes as the fund declined marginally in the first quarter due to the depressed performance of the stock market. The IPF reduced 3,6 percent to $5,3 million in the quarter to March 30, 2016 from $5,5 million in the quarter to December 31, 2015.

SECZ chief executive Mr Tafadzwa Chinamo told The Herald Business that the IPF’s levels are determined by the performance of the stock market, which constitutes 45 percent of its investment.

The rest is invested in money markets and property sector.

“The performance of this fund is dependent on how the stock market performs,” said Mr Chinamo in an interview.

“Given what the fund usually covers, it is enough to cover any risks. It has gone down because most of the investments are on the stock market and the equities market has not been doing well,” he said.

The equities market has been bearish on negative sentiment as investors shun the volatile market for other safer investment opportunities.

Since beginning of the year, the Zimbabwe Stock Exchange has fallen the heaviest among its regional peers, shedding off 13 percent of value.

As a result, Mr Chinamo added prospects were not as bright for the IPF for the quarter to June 30, as there have not been any catalysts in the economy to enhance performance of the local bourse and the fund.

The IPF was established in 2009 to provide compensation to investors for losses suffered as a direct result of financial collapse of a market player licensed by SECZ or the player being unable to meet its liabilities through insolvency malpractice or other causes.

As such, an investor will be compensated through the fund in the event a firm fails to pay its liabilities as a result of termination of trading or if declared insolvent by courts.

Under the fund, licensed securities traders and dealers are registered to collect a levy on every buy or sale deal and remit the money to the SECZ.