Interfin Securities and Remo Investments were yesterday suspended from trading at the Zimbabwe Stock exchange (ZSE).
ZSE chief executive officer Emmanuel Munyukwi, acting on the directive of the Securities Commission of Zimbabwe (SEC), made the announcement at the start of trading in the morning.
An official from the stock market confirmed the development, but said the reason for the suspension had not been disclosed.
“Interfin and Remo Securities have been suspended, but we have not been given the reason why,” he said.
“There were a series of high-level closed-door meetings at the stock exchange today (Wednesday).”
But market sources said the suspension emanated from settlement challenges between Interfin and Remo with the former having difficulties in meeting its obligations to settle deals.
ZSE is expected to set up a committee to investigate the issue, as it is believed it could just be a tip of the iceberg. The two stockbroking firms were among those recently licensed by SEC.
Efforts to get comments from Interfin and Remo were fruitless at the time going to Press yesterday.
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Several stockbroking firms have been struggling as a result of an illiquid market with less coming from foreign investors and little from local institutional investors. Only five stockbrokers are said to be contributing meaningfully to market turnover. Daily turnover is averaging $300 000.
SEC chairperson Willia Bonyongwe in January said stockbrokers were competing for a small market.
“Basically, that is why we are saying we need to grow the market. We have the potential as an economy,” she said.
Brokers receive a fixed brokerage fee of 1% on every transaction they make. The money they make is determined by deals they make a day on approximately two hours of trade they have.
According to the latest African Development Bank Monthly Economic Review foreign investments on the ZSE declined in February.
The report said although the country recorded a net inflow of $3,4 million, this was a decline from a net inflow of $13 million received in February 2011.
“This is mainly due to the prevailing economic environment, with February 2011 being a period prior to the implementation of the indigenisation policy which later in the year weighed down on stock performance,” reads part of the report. “The $3,4 million was also a decline from $17,8 million received in January 2012.
“Such a development could be attributable to a decline in bearish behaviour by foreigners, which had begun in January, who wanted to take advantage of the low price of shares that had been obtaining during the festive season.”
