ZSE will be fully automated by end of next year

THE Zimbabwe Stock Exchange will be fully automated by end of the first quarter next year as part of efforts at modernising the bourse so that it catches up with other exchanges, says chief executive Mr Alban Chirume.

"There is progress on that front," said Mr Chirume in an e-mailed response to questions from Herald Business.

"We are currently recruiting a consultant and other specialist resources to assist us in this very complex and delicate change. The progress will be a lot more visible in the second half of this year and for now I can only say we are eyeing first quarter of 2014 for completion. In the short to medium term, the ZSE will go through a period of rapid modernisation that will see it catch up and eventually overtake all the exchanges in the Sadc region except the Johannesburg Stock Exchange.

"Modernisation will be achieved through the implementation of critical automation projects and manpower development initiatives."

The ZSE is yet to digitalise its trading platform, some years after the idea was first mooted.

Some analysts say the continued use of manual trading system has partly contributed to subdued market turnover. The manual trading system has also compromised the viability of stockbrokers who are getting low commission.

"I believe automating trading is going to reduce the cost of doing business," said Mr Chirume.

"This will come through reduction of transaction costs and reduction in redundancy systems. From experience from other countries that have automated, volumes of trading more than triple when the stock exchange automates.

"Since the correlation of turnover to income of stockbrokers is nearly one, this will see the income of stockbrokers increasing in tandem with turnover," he added.

Mr Chirume, who assumed the hot seat at the Zimbabwe Stock Exchange about two months ago, said his vision was to see the ZSE being ranked in the top 10 bourses in terms of market capitalisation in Africa.

He said the ZSE was working on four major projects which are automation, demutualisation, review of listings rules and the second-tier exchange.

Mr Chirume said the demutualisation process should be complete or near completion before end of the year while consultations with stakeholders on listings rules have already started. The first draft is expected to be available to the stakeholders in the next few weeks, he said.

"With regard to the second-tier exchange, I believe we should have conducted a stakeholders' meeting to galvanise the thinking and agree on all the parameters (including the rules)," Mr Chirume said.