Alternative trading market, Finsec, comes alive
Zimbabwe’s alternative trading platform, Financial Securities Exchange (Finsec) recorded a total turnover of $1,2 million in November, the highest since its inception, as investors seeking diversification embrace the platform.
On Wednesday, Infrastructure Development Bank of Zimbabwe (IDBZ) became the second to list on the alternative trading platform , after listing its infrastructure bonds which were previously issued to support power supply and infrastructure projects for the subsidiaries of the Zimbabwe Electricity and Supply Authority (ZESA).
On Friday, microfinance company, Untu issued a prelisting statement, proposing to issue $5 million medium term notes on Finsec. Untu will be the third listing on the alternative trading platform.
The platform has so far traded 2,5 million since its inception in December last year, which translated to a total turnover of $3,1 million.
Finsec chief executive, Collen Tapfumaneyi told The Source that the recent increase in trading volumes on the platform is attributed to investor awareness.
“There has been a very dramatic rise in the trading and liquidity of those shares. So far about over two million shares have already exchanged hands on a proper platform. The beneficiaries are becoming more and more aware of this platform as opposed to the past when they did not know what to do with those shares , so everyday we are witnessing a trade,” Tapfumaneyi said.
In a year to date, about $2,54 million worth of shares have traded on the Finsec alternative trading platform.
Old Mutual is the only company trading shares on the platform after listing its Class B shares in December last year.
Following the listing of IDBZ bonds on the Finsec fixed income board, 800 units of bonds traded on the platform in November , which translated to $80,886.
Tapfumaneyi said Finsec is now poised to introduce more innovative financial instruments such as exchange traded funds (ETFs) on its platform.
“We are now waiting for listings of Exchange Traded Funds (ETFs) and we have had quite a few enquiries. From our surveys we come to realise that ETFs will be quite popular in this market, so we are expecting something to happen in the next few months,” said Tapfumaneyi.
He added that the alternative trading platform will also introduce more exotic products in the near future.
“Our platform is going to grow, although we start with the traditional standard product like equities and now bonds, what we had in mind in setting up this platform was to introduce new exotic products and they are quite a lot of them in the pipeline,” Tapfumaneyi said.
“Now that the market has embraced this platform, we are about to start rolling out new products. There will be more new exotic products than your traditional equities, so the next two or three years will be quite hectic.”
Volumes of trade are expected to double in the short to medium term upon the introduction of new products on the Finsec trading platform and the coming of a mobile trading application.
“We expect a huge increase in volumes. The reason why our volumes were low in the past has to do with channels of distribution, since we have been doing things the traditional way through brokers, which were not allowed to advertise. The coming in of the mobile technology gives us a huge channel through which we can publicise our products,” Tapfumaneyi said.
“We are looking at probably market wide volumes doubling once we introduce these products,” he added.
