eBusiness Weekly
Business Writer
Chengetedzai Depository Company (CDC) says the recently ZSE listed Tanganda Tea Company became the latest issuer to on-board its Central Securities Depository (CSD), which resulted in increased dematerialised shares and account opening activity.
The on-boarding of Tanganda comes at a time when Chengetedzai, SecZim and ZSE are engaged in a legal battle where Chengetedzai is challenging a SecZim directive on the migration process.
In an operating update for January 2022, Chengetedzai said the ZSE equities market capitalisation increased by 12 percent for the month of January 2022 closing at $1,475 trillion.
According to the update, securities registered on the CDC CSD accounted for 53,07 percent of total Market Capitalization for de-materialised shares, and their total value was $782,846 billion as of 31 January 2022.
“This is expected to increase as new listings on ZSE continue to choose CDC CSD as their CSD of choice. Tanganda Tea Company is the latest issuer to be added to the CDC CSD as they re-listed on the Stock Exchange,” CDC said.
The company added that the activity in CDC CSD account opening increased by 79,88 percent in January 2022 compared to the previous month.
“CDC CSD opened 608 new accounts compared to 338 accounts opened in December 2021. As a result, the cumulative number of accounts opened on the CDC CSD as of 31 January 2022 was 38,552,” said Chengetedzai.
The update shows that local investors accounted for 96,40 percent of all accounts opened on the CDC CSD as of 31 January 2022.
CDC said the ZSE equities market capitalisation increased by 12 percent for the month of January 2022 closing at $1,475 trillion. The total turnover for trades traded on the Zimbabwe Stock Exchange (CSD) was $4,149 billion for the month under review. During the month under review, a total of 2,974 deposits were processed by CDC CSD compared to 2,878 in December 2021, bringing the cumulative number of deposits since going live to 96,922.
“CDC CSD is embarking on a de-materialisation campaign to increase the de-materialisation ratio in 2022 for individual and institutional investors that still hold shares in physical form,” said the company.
According to the update, the average De-materialisation penetration ratio (Demat Ratio) across all counters was at 55,44 percent as at January 31, 2022.
The Old Mutual Top 10 ZSE Exchange Traded Fund (ETF) is the top dematerialised counter at 100 percent. Proplastics Limited and Meikles are the second and third de-materialised counters at 99 and 98 percent respectively.
According to Chengetedzai, the investor type that holds the largest value on CDC CSD are corporate and pension funds accounts with 28,55 percent and 27,43 percent respectively.
Individuals with 43,99 percent of accounts on the CDC CSD hold 2,89 percent by value in comparison. CDC said in the month of January, a total of 9,240 trades were processed, valued at $7,780 billion.
Last year SECZIM licensed multiple CSDs, which now includes Chengetedzai Depository and the Zimbabwe Stock Exchange Depository company. Former SECZIM CEO ,Tafadzwa Chinamo, said the directive was being issued in line with the commission’s mandate of regulating the capital markets.
Chinamo said the objectives include providing high levels of investor protection, encouraging free, fair, and orderly capital markets as well as reduction of systemic risks particularly in the trading, clearing and settlement ecosystem.
“Following the licensing of multiple Central Securities Depositories (CSDs), the commission hereby issues this directive with the aim of ensuring a smooth migration of deposited securities from one CSD to another.
“Migration process in terms of Section 159 subsections (1), (2) and (8) of the Companies and Other Business Entities Act (Chapter 24:31), “COBE”, the company, herein referred to as participating issuer of listed securities, is required to keep and maintain a register of its members at its registered office or its appointed agent(s).
“Where the participating issuer of listed securities elects to migrate from one CSD to another, there shall be certain steps to be followed,” he said.
