admin
Business Reporter
THE Zimbabwe Stock Exchange (ZSE) says it has recorded significant milestones in its evolution, among them its key role in the establishment of the Capital Markets Association of Zimbabwe (CMAZ) earlier this year.
This is contained in the bourse’s third-quarter report.
Following its formation, CMAZ has been actively involved in strategic discussions with the Securities and Exchange Commission of Zimbabwe (SecZim), contributing holistic industry views on critical issues.
“These discussions included matters such as ZSE transaction costs such as Capital Gains Withholding Tax (CGWT) and Stamp Duty, tax exemptions for real estate investment trusts (REITs), and increased regulatory costs from SecZim.”
Gregory Mashanda, a capital markets analyst, commended CMAZ’s efforts, noting that, “CMAZ’s collaboration with SecZim and its role in key strategic discussions is vital for streamlining regulatory frameworks.
“The association’s involvement will ensure the market remains competitive and attractive to new investors.”
CMAZ is preparing for the 2024 Capital Markets Awards in collaboration with Financial Markets Indaba and leading business news publication Business Weekly, further solidifying its role in shaping the future of Zimbabwe’s capital markets.
The ZSE also provided updates on its project pipeline, most notably the anticipated shift in its settlement cycle.
The ZSE Depository, which keeps securities certificates on behalf of clients, is actively exploring the possibility of reducing the settlement cycle where settlement of a trade occurs three business days after the trade is executed (T+3) to T+2.
“Engagements with market participants were successfully conducted, and end-user tests with market participants are now underway,” the report said.
This development is on track, with the reduced settlement cycle expected to go live in the first quarter of 2025.
The move to a T+2 settlement cycle is expected to provide substantial benefits to the market.
The report emphasised that “Reducing the number of days between trade execution and settlement will reduce counterparty, market, operational, and credit risk across the settlement ecosystem, especially during periods of market volatility.”
Alfred Chapwanya, an institutional investor, applauded the proposed move to a T+2 settlement cycle, stating that “This reduction in settlement time will not only minimise risk exposure but also enhance market liquidity, giving investors quicker access to their funds.
“It is a welcome development for both local and international players.”
According to the ZSE, the faster settlement cycle will improve liquidity, enabling investors to benefit from earlier receipt of their funds, thus reducing the risk of loss of value due to adverse macroeconomic movements.
Additionally, the ZSE believes that “The shift to T+2 will strengthen market confidence, which is key to attracting both domestic and foreign investors.”
This proactive approach by the ZSE underscores its commitment to improving market infrastructure and enhancing investor confidence in Zimbabwe’s capital markets.
Online Reporter