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NewsDay

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CSD takeoff stalls

News
The signing of the shareholder agreement paving way for the formation of the country’s historic Central Securities Depository (CSD) has suffered a setback after sharp differences over the ownership structure emerged. A CSD is an entity that holds and administers securities and enables transactions to be processed by book entry. The Zimbabwe Stock Exchange (ZSE) […]

The signing of the shareholder agreement paving way for the formation of the country’s historic Central Securities Depository (CSD) has suffered a setback after sharp differences over the ownership structure emerged.

A CSD is an entity that holds and administers securities and enables transactions to be processed by book entry.

The Zimbabwe Stock Exchange (ZSE) currently utilises a call-over system to execute trade.

The Securities Commission of Zimbabwe (SECZ) announced that parties to the CSD would last Friday sign a pact clarifying the shareholding the new firm.

The capital markets regulator later postponed the event amid indications that stockbrokers were unhappy with clauses relating to dividends.

Market sources said the brokers were also unhappy with the decision by the capital markets regulator to inform them of this signing ceremony on the 11th hour.

“As of Thursday, a day before the signing of the agreement brokers were left in the dark,” the source said.

“They also expressed concern over a clause relating to dividend sharing.”

Under this deal, the ZSE is expected to control 15% of the CSD; ZB Financial Holdings 13%; National Social Security Authority 13%; IDBZ 10%.

Chengetedzayi Depository Company, a consortium of local businessman and their technical partners, which won the bid to run the CSD, is expected to hold a 49% stake.

ZSE chairperson Eve Gadzikwa yesterday confirmed that the exchange was seeking more clarity of the shareholder agreement amid concerns from stock brokers.

She, however, could not give a specific date on when the agreement would be signed.

“I can’t give you a date. That will depend with the consensus from our discussions because we are still finalising the shareholder agreement with Chengetedzayi,” Gadzikwa.

“We are also trying to clarify certain aspects of that agreement and hopefully that should be done by the coming week.”

SECZ chief executive officer Tafadzwa Chinamo also concurred saying the outstanding issues would be resolved soon.