Volumes build on Finsec as awareness grows

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Kudzanai Sharara
Trading volumes on the alternative trading platform, Financial Securities Exchange (Finsec) board showed an upward trajectory in 2017 as awareness coupled with perceived currency risks saw investors diversifying their portfolios into equity markets.

Prices on the Finsec board also strengthened significantly in the last quarter of the year in line with trading trends in the mainstream stock market, the Zimbabwe Stock Exchange.

The ZSE’s main Industrials Index was up 130,42 percent in 2017, its biggest one year gain since dollarisation while the Minings Index was up by more than 143 percent.

Responding to emailed questions, Escrow Group Executive Director Garikayi Munema said volumes on Finsec continued on an upward trend during the course of 2017.

“Having risen by 26 percent in the second quarter, volumes increased by 63 percent in the third quarter and the fourth quarter saw a volume increase of 103 percent. In the third quarter approximately 542 000 shares changed hands.

Munema said prices which had remained stuck during the first two quarters moved 59 percent in the third quarter and increased by another 56 percent in the last quarter of 2017.

On listing day, back in 2016, Old Mutual Zimbabwe shares were trading at 82 cents but the share price has since jumped to current levels of 205 cents, but still below highs of 210 cents per share reached on the 15th of November last year when stocks across all local markets rallied to record levels.

In November, Finsec recorded a total turnover of $1,2 million, the highest since its inception, as investors seeking diversification embraced the platform. By end of November the platform had traded 2,5 million shares since its inception in December last year, which translated to a total turnover of $3,1 million.

In November 2017, FINSEC recorded its second listing in the form of IDBZ series 1 and series 2 Infrastructure Development Bonds. This was the first listing on the Fixed Income Board of the exchange. The bonds were previously issued to support power supply and infrastructure projects for the subsidiaries of the Zimbabwe Electricity and Supply Authority (ZESA).

Following the listing of IDBZ bonds on the Finsec fixed income board, 800 units of bonds traded on the platform in November, which translated to $80 886.

Munema said Finsec was in advanced stage of having a third listing as microfinance company, Untu Capital has already issued a pre-listing statement, proposing to issue $5 million medium term notes on Finsec.

“In January 2018, we anticipate listing of UNTU Capital Medium Term Note to be the second counter on the Fixed Income Board,” Munema said .

He added that the platform was also working on introducing more innovative financial instruments such as exchange traded funds (ETFs) on its platform.

“A number of new and innovative products are at advanced stages of regulatory approval and will be launched in the first quarter of 2018.

“User Acceptance Testing of some of these products are already underway and the market should brace for exciting products soon,” Munema said.

Munema noted that mobile and online trading of securities is now complete and technical integrations of the necessary participants has been done, tested and certified as ready for launch.

The development coupled with increased awareness is expected to boost volumes on Finsec’s various platforms.

Speaking late last year, Finsec CEO Collen Tapfumaneyi said the platforms were expecting a huge increase in volumes.

He said the coming in of the mobile technology gives Finsec a huge channel through which it can publicise its products.

“We are looking at probably market wide volumes doubling, once we introduce these products.”

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