daniel chigunwe
Nelson Gahadza
The Securities and Exchange Commission of Zimbabwe (SecZim), says the Investor Protection Fund (IPF) slightly increased by 2.31 percent to ZiG54,18 million in the quarter to June 30, 2024, from ZiG52,96 million in the prior quarter, driven by growth in listed equities market value.
The purpose of the fund is to provide compensation to protected investors for losses suffered as a direct result of a licensed contributor to the fund being unable to meet their liabilities through insolvency, malpractice or other causes.
According to the Securities and Exchange Commission of Zimbabwe’s (SecZim) financial sector report for the first quarter to June 30, 2024, listed equities’ market value increased by 2,44 percent to ZiG35.02 million from ZiG34,19 million recorded in the prior quarter.
“The unclaimed shares portfolio valuation as of 30 June 2024 stood at ZiG46,68 million and US$830 771,74,” reads the SecZim report.
During the quarter under review, the IPF exposure was 65 percent to listed equities, 18 percent to direct property, 12 percent to indirect property and 2 percent in the money market as well as cash and other accounts.
The fund was one percent exposed to unlisted equities while it had no investments in commodities.
SecZim last year drafted a Statutory Instrument to encourage investors to claim their shares from the Investor Protection Fund.
The commission said the project includes the removal of statutory fees upon an investor coming forward to claim their shares and trade them through the market.
According to the SecZim report, the total value of securities administered by the transfer secretaries as of June 30, 2024 amounted to ZiG46,89 billion, representing a significant increase from ZiG28,87 billion in the prior quarter.
“The increase of ZiG18.02 billion represents a quarterly expansion of the market capitalisation value for listed securities on the Zimbabwe Stock Exchange during the period under review,” reads the report.
SecZim, however, said of notable concern is the sluggish increase in USD share register value to USD$1,25 billion as of 30 June 2024, compared with US$1,23 billion as of 31 March 2024, and this is an indication of the slow growth in stocks listed on Victoria Falls Stock Exchange.
SecZim said the sector’s earnings were rated satisfactory and the industry reported a profit of ZiG8,13 million during the quarter under review, a significant increase from ZiG3,6 million reported during the previous quarter.
“This was due to an increase in fees charged on share register value by all three transfer secretaries. All three firms reported positive earnings during the quarter under review,” reads the report.
During the quarter under review, the staff cost to operating expenditure ratio has remained high, with an industry average of 57,63 percent.
ZB Transfer Secretaries and Corpserve Transfer Secretaries had a ratio higher than the industry average, and the sector’s capital was rated satisfactory, with all three Transfer Secretaries adequately capitalised, above the minimum capital requirement of ZiG2,06 million (US$150 000,00) as of 30 June 2024.
According to SecZim, the three transfer secretaries reported a capital adequacy ratio well above 2,00x, an indication of ample capital levels above the minimum required.
Bongani Ndlovu