ZSE automation may boost FDI

Published: 11 December 2013

The Zimbabwe Stock Exchange (ZSE) says its automated trading system (ATS), expected to function in the first quarter of next year, will augment efforts to attract foreign direct investment (FDI) into the country.

This comes as the system is anticipated to boost equities' daily turnover to more than $5 million as global trends show that upon conversion to automated trade, turnover increases by a factor of five.

The local bourse's daily turnover - which is the value of shares traded per day - currently averages $1, 5 million.

"Because of the global nature of securities markets, the ZSE wishes to play its part in attracting foreign funds into the country and will do so through establishment of securities market infrastructure comparable to any found elsewhere in the world," said the local bourse's operations executive Martin Matanda.

He added that markets consolidation and harmonisation were happening in many different parts of the world thus the ZSE had strong desires to be ready for any consolidation and cross border initiatives which may occur in the Sadc region.

"This state of readiness can only be achieved by putting in place a modern system with the requisite capabilities," Matanda said.

Last month, the ZSE shortlisted four companies for the supply and installation of an automated trading system (ATS).

The bourse expects the system to be up and running by the first quarter next year.

Alban Chirume, ZSE's chief executive, said the four were Chartered Systems Integration, National Stock Exchange of India, New York Stock Exchange Euronext and Infotech Middle East.

The automation of the bourse has been on the agenda since 2000 although plans have been stalled due to liquidity constraints.

In September, Central and Settlement Company of Mauritius (CDSM) was appointed consultant and is expected to review business processes of the ZSE, prepare a request for proposals, advise the local bourse on the process of vendor selection and prepare the system for implementation.

Chirume, said the ATS is poised to treble the ZSE's annual turnover to around $1,5 billion from just below half a billion.

"CDSM has a visible footprint in the automation projects carried out elsewhere in Africa and we are delighted that our own initiative has attracted their interest," he said.

The former SecZim boss noted that the consultant is expected to review business processes of the ZSE, prepare a request for proposals, advise the local bourse on the process of vendor selection and prepare the system for implementation.
- dailynews