KINGDOM Stockbrokers (KSB), a unit of financial services group AfrAsia Kingdom Zimbabwe Limited, has wound up operations after the firm decided not to renew its operating licence amid indications that management intends to refocus the business, NewsDay Business has learnt.
Report by Bernard Mpofu
Securities Commission of Zimbabwe (SECZ) chief executive officer Tafadzwa Chinamo confirmed that KSB had not renewed its licence after the previous licence expired.
The move means the firm would stop trading on the Zimbabwe Stock Exchange, 18 years after it first registered.
According to a circular issued by SECZ last December, the 2013 renewal fees for individual securities dealers and securities dealing firms could be paid in installments up to a period ending April 31.
The brokerage firms are required to submit application forms together with a payment plan and the latest management accounts. The commission levies 1% of the application fee plus an interest at the prescribed rate if securities-dealing firms miss the deadline by at least seven days. “It’s true that they have not renewed their licence,” Chinamo said.
“But my understanding is that from a group point of view they decided not to renew their licence in line with their strategies. “It’s not that they failed to raise the capital.”
Efforts to get comment from AfrAsia Kingdom Zimbabwe Limited group chief executive officer Lynn Mukonoweshuro were in vain at the time of going to print yesterday as her phone continued to ring unanswered.
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Market sources said the KSB wrote to the SECZ informing the capital markets regulator on its plans to stop operations. Brokerage firms were due to renew licences by January 31 after raising $150 000 in cash.
“It appears as if they have taken a wait-and-see attitude before they resume operations,” said a source close to the developments. “KSB wrote to the SECZ informing the commission that they will be no longer trading.
“They indicated that they were winding down and closing open positions as well as settling any outstanding settlements.
“This means that the firm has also started delivering out all scrip in nominees and safe custody to the respective principal holders.” Despite recording remarkable gains at the start of the year, experts say with stockbrokers charging 1% commission on each side of every trade, the future of independent stockbroking firms could be bleak given the subdued performance of the ZSE over the last three years.
Market players contend that nearly 80% of the trade on the ZSE are handled by at least five brokers, which means these could have taken the biggest chunk of the commission.
The five firms – Lynton Edwards, Imara Capital, MMC Capital, EFE Securities and Old Mutual – had since dollarisation of the economy been the more dominant players on the exchange.
