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Business Reporter
Fifteen more securities listed on the Zimbabwe Stock Exchange have registered for electronic clearing, transfer, settlement and storage on the central securities depository system.The newly registered stocks include African Sun, ART, Ariston, Astra, Barclays, BNC, Dairibord, Edgars, Falcon, Hippo, Meikles, NMBZ, Pearl, ZPI and Zimplow.

Cottco, CBZ and FBC were the first securities to be cleared and settled on the new CSD system, which became effective on the 8th of this month.

Administrators of the electronic clearing and settlement system, Chengetedzai Depository Company said the 15 securities will not be cleared physically from the 6th of next month.

“The investing public is encouraged to open securities accounts through a registered custodian and deposit their securities, before trading of such securities in electronic form,” Chengetedzai said in a statement yesterday.

Chengetedzai chief executive Mr Campbell Musiwa recently said that ZSE would witness improved foreign trades after the launch of the CSD system.

Mr Musiwa said investors from America’s pension funds were not allowed to invest where there is no CSD. At least 70 percent of ZSE trades are foreign.

The CSD system is positive for the local bourse as it is going to reduce the securities settlement time cycle.

ZSE has set the target to trade at T+3 settlement time frame on trading securities by  June next year from T+7. The T denotes day and the digit stands for the days before completion of settlement.

Zimbabwe has over the past five years been moving towards the electronic clearing and storage system of securities as opposed to the physical processing, transfer and storage approach.

The CSD will enhance trading of securities and reduce the inherent risks associated with paper based trading, settlement and clearing of the securities.

The move towards paperless settlement, clearing and storage of securities is one of the ways the ZSE is working on to improve operations of the local bourse.

The ZSE is also working on demutualisation of the current society based ownership of the stock exchange.

Under a demutualised ZSE, stockbrokers will hold 34 percent stake in what is set to become a privately owned entity, which also plans to publicly list on the bourse.

Stock-brokers shareholding will come down from the current 68 percent while that of Government, through quasi-state entities, will increase to 34 from 16 percent.

The remaining 50 percent will be open to private investors with 20 percent going to private placement to raise $2 million and the remaining 30 percent will be issued under an Initial Public Offering.

After signing the MoU for the demutualisation, Finance Minister Patrick Chinamasa said the current set up posed governance problems as the owners were also the managers and participants on the bourse.