Chengetedzai to introduce CSD penalties in June

The Zimbabwe Stock Exchange

The Zimbabwe Stock Exchange

CHENGETEDZAI  Depository Company (CDC) says turnover for the three months to March 2016 was $43.33 mln with 1 899 ZSE trades processed between 1 January 2016 and 31 March 2016 bringing the total since going live to of 9 865.

In a CSD operating update, Chief Executive Campbell Musiwa said there was improved trading activity in March 2016 on the back of positive results released by some of the heavyweight counters listed on the ZSE.

Monthly turnover for March increased 5.6% to $16.4 million while the total number of CSD accounts opened increased 2.8% to 4 767.

Overall, Individual investors remain the largest single class of investors on the CSD with 39% of the accounts opened to date.

Musiwa said as at 31 March 2016, dematerialised securities accounted for 41% of the ZSE market capitalisation.

He said average demat ratio across all counters remains at 30% while the top 10 counters have an average demat ratio of 55%.

The CSD processed 1,562 securities deposits during the period under review and the cumulative number of securities deposit transactions increased 5% from 34,302 in December 2015 to 35,864.

According to Musiwa, Pearl Properties Limited remains the leading counter with a demat ratio of 79%.

On the penalties framework, the CE said CDC gave a 60 day notice on the implementation of a Penalties Framework to Custodians and this was after the CSD had met all the outstanding issues that were agreed as necessary to clear before the implementation of Penalties.

“This puts the date for the introduction of Penalties on the CSD at 13 June 2016,” he said.

Musiwa said the CDC continues to work with the ZSE on the Debt Market Project and draft business process flows for the Bond market have been crafted for extensive review by key participants.

He said focus remains on the expansion of the CSD product base and Chengetedzai expects to unlock momentum on the Fixed Income Project in Q2 with a visit by the system vendor expected.

In terms of market value, Musiwa said the bearish trend that has dominated the ZSE since 2015 continued in 2016, with market capitalisation further declining 15% from $ 3.04 billion recorded as at 31 December 2015 to close Q1 at $ 2.65 billion.

He said the market value of the securities that are placed on the CSD declined 9% from $1.21 billion in December 2015 to $ 1.09 billion in March 2016. Dematerialised securities accounted for 41% of the ZSE market capitalisation. FinX
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