In the 19th century Baron von Reuter, the German founder of what is known today as Reuters Holding private limited company used carrier pigeons to fly stock and market quotations between Brussels and Aachen in Germany.
Since then the capital markets have seen revolutionary changes which led to physical locations where stockbrokers met and used the open cry method to negotiate on behalf of buyers and sellers. With the improvement in technology in the late 20th century, the need for a physical location became less important and traders started to transact from remote locations over the web or on wide area networks.
Since the creation of NASDAQ as the first electronic exchange in 1971 exciting trends are emerging in financial technology, and the advances are touching every part of the traditional capital market industry. There is so much innovation going on in the capital market that by partnering to fully participate in that innovation, market participants begin to realise a distinct competitive advantage.
The Zimbabwe securities market has not remained stagnant but has also adopted technological innovations providing tremendous advantages to all capital market participants. The country’s capital markets sector provides a complete electronic platform for the issuance, holding, trading and settlement of securities. This development will allow securities dealers to ride on the technological wave and match buyers and sellers in real-time and remotely.
Investors across the geographical spread can now participate on the stock markets in real-time through mobile phones and hand-held devices. C-TRADE provides technology solutions which meets the needs of the modern investor. The C-TRADE Unstructured Supplementary Service Data (USSD) platform enables investors on non- smartphones to buy and sell shares by simply dialing the *727# short code across all mobile networks in Zimbabwe giving every Zimbabwean direct access to the capital market with enhanced efficiency and convenience. For those with internet access and Zimbabweans in the diaspora, C-TRADE online and the C-TRADE mobile app makes it possible to invest in shares anytime, anywhere.
Through these tools, investors can trade securities, make or receive payments and obtain statements. The use of wireless technologies in securities trading is now allowing investors to access trading platforms, from mobile phones rather than being confined to traditional trading methods. This technology provides easier access for smartphone users to actively manage their portfolios on the go.
The use of paper based transacting methods and its associated shortcomings that include but not limited to risk of loss of documents of title, delays due to movements of paper documents between different offices and different participants is slowly but surely fading away. Technology is also enhancing financial inclusion and the introduction of more innovative products and services that are making capital markets more attractive to investors and those seeking savings opportunities.
The continued growth of technology will present even greater opportunities for expansion and innovation in capital markets especially as investors become more wired and more comfortable with communication technologies. The effects will be felt throughout the capital markets sector and will redefine the way securities are issued, traded and settled. An increased number of investors, especially retail investors is also expected to actively increase the number of investors participating in securities trading as a result of the convenience, security and efficiency brought by technology.