Finsec turnover down 43pct in February, analysts urge remodelling

Finsec turnover down 43pct in February, analysts urge remodelling

HARARE, March 8 (The Source) – Zimbabwe’s alternative trading platform (ATP), Financial Securities (Finsec) recorded a 43 percent decline in turnover for February  from $75,883 in January to $43,051 due to lack of investment alternatives.

The ATP which is the first to enter a market dominated by the Zimbabwe Stock Exchange (ZSE) ,was designed to broaden and deepen the capital market participation by smaller companies.

Old Mutual Zimbabwe Limited (OMZIL), which listed 83,011 818 B Class shares, is the only listed company on the platform, with Escrow, which manages the platform, saying some were in the pipeline.

Volume of shares traded on the ATP decreased from 92,461 shares in January to 52,457 shares in February.

The Finsec index remained unchanged at its base value, 100 points,  with OMZ’s B class shares  unchanged at 82.07 cents since their listing on December 1 last year.

Additionally, market capitalisation remained at $68.128 million.

Market turnover is most likely to remain low on the Finsec trading platform due to lack of investment options.

Analysts say Finsec could possibly model itself on South Africa’s ZAR X and 4AX, alternative bourses that were recently granted licences to challenge the Johannesburg Stock Exchange (JSE), which has dominated that space for over half a century.

These new trading platforms are set to offer an alternative platform that targets retail and institutional investors. They also intend to list a range of asset classes, such as equities, debt and special purpose vehicles.

In particular, 4AX seeks to list small and medium-sized businesses by April, such as township entrepreneurs in order to gives their businesses access to additional capital.

“Finsec should go beyond focusing on issuers with security trading restrictions, such as over-the-counter and broad-based black economic empowerment schemes, in order to introduce more retail investors to stock market investing,” said an analyst.