ZSE automation improves trade

Oliver Kazunga Acting Business Editor
THE Zimbabwe Stock Exchange (ZSE) automation has improved trading on the bourse with over $200 million worth of shares being processed since September last year.

Before the installation of an Automated Trading System (ATS), trading of shares on the ZSE was done manually.

Data from the stock exchange shows that since the implementation of an ATS, there has been an improvement in share dealings.

The ZSE has revealed that 50 out of 61 active counters were now trading their shares using the electronic system with over 30,000 transactions having been processed since September last year.

An ATS is a computer programme that creates orders and automatically submits them to a market centre or exchange; in this case, the submissions will be made to the already functional Central Securities Depository.

The automation system can be designed to trade stocks based on a predefined set of rules which determine when to enter an order, when to exit a position and how much money to invest in each trading product.

Automation of the local bourse was done to keep it in line with regional trends such as South Africa, Zambia, Namibia and Kenya.

The ATS has been linked with the CSD to enable interaction of the two platforms and curb the selling of non-existent and blocked shares.

Presenting the 2016 national budget in November, Finance and Economic Development Minister Patrick Chinamasa announced that performance of the ZSE had remained depressed since the beginning of the year.

He said this was due to illiquid conditions and high trading costs, among others challenges.

The main-stream index opened the year at 162.79 points, and had declined to 131.93 points by end of September 2015 while market capitalisation fell by 20 percent from $4.33 billion to $3.44 billion over the same period.

Chinamasa said the on-going efforts by the government to grow the economy, augurs well for the recovery of market activity at the ZSE from next year.

In the interim, he pointed out that it was necessary that measures be instituted to lower trading costs, and broadening the variety of products offered on the market.

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