Stockbroking firms face hard times

A NUMBER of stockbroking firms may be forced to close or consolidate due to the depressed performance of the Zimbabwe Stock Exchange (ZSE).


A stockbroker said the turnover being realised on ZSE was too little to be shared by the 13 brokerage firms.

The low turnover comes as five firms account for 80% of the market, leaving eight firms to scramble for crumbs.

Benson Gasura
Stockbrokers Association of Zimbabwe chairperson, Benson Gasura [/Caption]

“We may see some consolidations in the market, we can see closures as well, as the cake, is getting smaller and smaller,” a stockbroker said.

Industry players said the main challenge for brokers was viability and not enough business to sustain players. They say the delistings that were witnessed on the market had worsened the situation.

Stockbrokers Association of Zimbabwe chairperson, Benson Gasura declined to comment.

The stock market is a mirror image of the performance of an economy. ZSE has been bearish with few trades and has lost close to $1,2 billion in market value.

ZSE’s annual turnover for 2015 was $228,6 million, the lowest since the introduction of the multicurrency regime in 2009.

Foreign investor participation on the market has declined and currently stands at 50% from a peak of 70% in 2014.

Our sister paper, the Zimbabwe Independent, reported last week that five stockbroking firms and individuals have sold their shareholding in the soon-to-be demutualised local bourse.

The move was as a result of an agreement by stock broking firms that no single brokerage firm would exceed 10% of the new entity.

The demutualisation process will see stockbrokers and government owning 68% and 32% respectively in ZSE.

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