Zim stockbrokers feel the pinch as ZSE trade subsides

As trading activity remains subdued on the Zimbabwe Stock Exchange, some brokers are likely to cease operations as they are handling only a few deals, market watchers have said.

Out of 19 registered trading stockbrokers, only a few companies with international connections are still making meaningful business transactions.

Figures obtained from the ZSE show that turnover realised on the ZSE since the beginning of this year amounted to US$416,2 million and of this amount, stockbrokers earned about US$8 million from the commission they charge on transactions.

"That amount could appear big, but it's only going to a few brokers, about six of them.

"It's an 80 (percent)-20 percent rule . . . that is very few brokers, especially those with some international connections, are getting meaningful busi- ness while most are struggling," said one stock- broker.

Since dollarisation, foreign investors have been dominating the market and a few stockbrokers handled most of their deals.

In a report on the stockbroking industry, Kingdom Stockbrokers said the perception that most firms could go under could be misplaced as most brokers have put in place a number of measures to stay in business.

However, Kingdom has admitted that some brokers could wind up operations if the current low turnover trend continues.

"There is consensus that a few brokers dominate the industry and, as such, there are others facing financial constraints. As such, there is possibility that one or two severely strained brokers may cease operations," said Kingdom.

Stockbrokers that are understood to be enjoying good business include Lynton-Edwards, Imara, EFE Securities, Interfin, ABC Stockbrokers and New Africa Securities.

Imara is operating well largely due to its strong regional connections. It has offices in Botswana and Nigeria among other countries.