ZSEs CSD test run underway

Published: 11 November 2013

The Zimbabwe Stock Exchange's (ZSE) Central Securities Depository will be up and running before the end of the year, an official has said.

Establishment of the central securities depository (CSD) is part of on-going efforts to modernise the local bourse which are expected to be completed in the first quarter of 2014.

A securities depository is a financial organisation with a wide range of responsibilities but its core function is holding securities in electronic form, enabling easy transfer of shares during trading. The CSD will enable the ZSE, which is currently using a manual system involving share certificates, to conduct paperless trading in line with global trends. Securities and Exchange Commission of Zimbabwe chairperson Willia Bonyongwe said Chengetadzai, the company tasked with setting up the CSD, was already at work.

"They are currently testing the systems and I am assured that by year end, our Central Securities Depository will be running," Bonyongwe said.

The SECZ chairperson has previously said the current manual system was not transparent and could be manipulated to the disadvantage of investors. Bonyongwe said full automation of the bourse was anticipated by the end of first quarter in 2014. Automation was part of a whole range of initiatives which SECZ was pushing to improve the capital markets to attract new investors.

"Capital flows where there is good corporate governance adherence," she said.

ZSE chief executive Alban Chirume has said automisation is likely to result in an increase in the volume of shares traded on the bourse as well as make it more liquid.

Even government is hoping that automation and improvements in the regulation of the capital markets will result in significant foreign investment flows.

Finance Minister Patrick Chinamasa said the capital markets would play a pivotal role in Zimbabwe's economic take off.

"We are on the verge of an economic take off and we want the capital markets to play a pivotal role in that journey," he said, adding that the markets were critical for long term resource mobilisation.

- New Ziana