The Securities Exchange Commission of Zimbabwe (SECZ) has set its eyes on the diaspora as it accelerates its campaign to lure investors on the capital markets.
BY NDAMU SANDU
The push to lure the diaspora will be aided by the online trading and reporting of securities which is expected to go live by December.
SECZ chief executive officer Tafadzwa Chinamo said the digital platforms would be key to reaching out to the diaspora market.
“We will have a more focused drive on the diaspora starting later this month, where we will be making a case for the capital market in Zimbabwe as a viable investment option despite the challenging environment,” Chinamo said.
Over 3 million Zimbabweans are living in the diaspora and have been sending money to families back home. Diaspora remittances were down 17% in 2016 to $779 million attributed to the poor performance of the global economy, the depreciation of the South African rand (South Africa contributes about 34% of the total diaspora remittances) and the increasing preference of the Diaspora to send remittances in kind and through informal channels, according to monetary authorities.
Chinamo said the capital markets regulator was making good progress on online trading and reporting of all securities across the entire capital markets and has engaged Escrow Systems to undertake the process. Escrow also provided the system that runs the alternative trading platform to Finsec.
Since July, SECZ has been on a campaign to raise awareness on the digital platforms on the investment alternatives available on the capital markets. Chinamo said there has been a marked increase on the number of individuals trading on the market.
The capital markets, Chinamo said, was predominantly listed shares (stocks) traded on the Zimbabwe Stock Exchange. It also has an alternative trading platform with a single share listing. There are more plans to list bonds on the bourse after Getbucks listed $30 million bonds on the bourse.
“Bonds provide investors with a low appetite for risk to enjoy regular income and an assurance that they will get their capital back,” he said.
Chinamo said the cost of trading shares was on the high side compared to the region.
“On the buying side it costs an investor 1,69% of the value of the shares and 2,69% when selling. Compared to the region these are very high and it’s our goal to bring them down to competitive levels in the region. A big cost on our exchange is the 1% capital gains withholding tax on sale proceeds. We are lobbying for the tax to be on gains and not on total sale proceeds as is the case now,” he said.