Electronic share trading is due to go live today, 3 July, at the Zimbabwe Stock Exchange (ZSE) with new trading hours for the exchange. According to an announcement yesterday all registered stockbrokers meet the requirements and will be able to provide uninterrupted services and the new platform trades only the securities that are dematerialized at the central securities depository (CSD) Chengetedzai Depository Company.
The new automated trading system (ATS) has been supplied by InfoTech, an IT firm headquartered in Singapore with offices in Pakistan, United Arab Emirates and Ghana. It replaces the call-over through which stockbrokers traded shares in Zimbabwe since the bourse was established in 1896 including stockbrokers gathering in a room once or twice a day to discuss trades on a list of securities.
According to the ZSE announcement: “The new electronic platform enables participants to conduct their business from various locations by accessing the ZSE through the Internet. The ATS operates on agreed rules which are in-built in the system and therefore guarantees adherence to price and time priority principles in the interest of market fairness and transparency”.
Newsletter ATS Watch published on 2 July says the ATS hardware was installed in May 2015 including servers and disaster recovery servers. It has “close coupling” links to the CSD: “Given the need to ensure real time exchange of information, the ZSE opted for close coupling and the vendors of both the CSD and the ATS worked for at least six months to ensure that the interface for close coupling was provided.”
Training ran from 8-26 June, led by Ejaz Anwar (Project Leader), Dilshard Ahmad and Muhammad Asghar from InfoTech. Martin Matanda, Operations Executive of the ZSE, is also the project manager leading a team of consultants and IT staff. Training was given to staff of ZSE, the Securities and Exchange Commission of Zimbabwe and the CSD and there was separate training for all other market participants, mainly stockbrokers. Trainees learned how to enter orders and generate reports. Participants also talked to the system vendors and this led to refinements being made to the system to ensure that it is fully customized to the Zimbabwe capital market. Mock trading has also been held.
Other key changes in trading include:
1. New trading times (local time): Monday to Friday (except public holidays)
Continuous Session – 10:00 am to 12:30pm; Market closes – 12:30pm
2. Continuous trading during open sessions, which means multiple prices could be established and traders will have more flexibility
3. The ATS can only trade dematerialized securities that are loaded at the CSD via Chnegtedzai’s Depo/X facilities
4. Algorithms will discover the prices, so that an order can be filled at different prices depending on the book
5. Circuit breakers on price with lower and upper price limits (percentage) for each counter on the ATS, based on the previous closing price. These limits can be set for all counters or for each counter
6. Real-time data throughout the “open” phase, accessible to market participants and other stakeholders for a fee
Manufacturing and construction Masimba Holdings on 8 June separately listed its plastics manufacturing subsidiary, Proplastics, on the ZSE through a dividend-in-specie, according to a news report. It is the second listing on the ZSE in 5 years after Padenga Holdings which also listed through a dividend-in-specie following its unbundling from Innscor Africa in 2010. The last initial public offering (IPO) of shares was Zeco Holdings in 2007.
The latest listing of 60,000 shares at 3c follows a successful restructuring exercise by listed Masimba that resulted in the group unbundling the plastics manufacturing from the construction business. The aim is for both entities to attract capital and strategically position themselves in line with their core business, to unlock shareholder value and Proplastics focus on it business.