About the Zimbabwe Stock Exchange

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History of the Zimbabwe Stock Exchange

The origins of the Zimbabwe Stock Exchange date back to the arrival of the Pioneer Column in 1896. The true forerunner to the ZSE of today was founded in Bulawayo in January 1946, shortly after the end of the Second World War. In December 1951, a second floor opened in Harare (then known as Salisbury), and trading between the two cities was conducted via telephone.

Several years later, stakeholders agreed that legislation was required in order to protect the rights and obligations of all concerned, and in January 1974, the Zimbabwe Stock Exchange Act (then called the Rhodesia Stock Exchange Act) was passed into law, consolidating the 2 exchanges. In order to meet legal requirements, a new exchange came into being, although trading continued uninterrupted.

The ZSE Today

Trading is done manually on the ZSE and is conducted in a daily call over that begins at 10.00am and ends before noon. Settlement is on a T+7 day basis and is against physical scrip delivery. Plans are underway for the establishment of a central depository system as well as an electronic trading system. Currently, Barclays Bank of Zimbabwe and Stanbic Bank of Zimbabwe offer custodial services to both local and foreign investors.

Foreign participation on the ZSE commenced in 1993 when exchange control regulations were lifted.

Currently, foreign investors may hold up to 10% of a listed company, and collective foreign ownership cannot exceed 40%. However, these rulings do not apply to holdings acquired before 1993. Old Mutual and PPC shares are fungible, and may be traded on the JSE, and also the LSE in the case of Old Mutual.

The ZSE is headed by a CEO, who supervises and monitors the trading process to ensure transparency in the market and to prevent manipulation. All trades for listed securities are declared and confirmed by the ZSE. Any unethical activities are dealt with within the framework of the rules and regulations governing stock market transactions in Zimbabwe.

A board of directors oversees the affairs of the ZSE. The board consists of five independent, non-executive directors, the CEO of the ZSE and a representative of the stock brokers. This is an interim board, and will serve until the conclusion of the ongoing demutualisation exercise, after which a substantial board will be elected at a general meeting.

Charge Buying Selling
Brokerage 1.00% 1.00%
Stamp Duty 0.25% 0.00%
Securities Commission Levy 0.18% 0.18%
Investor Protection Levy* 0.05% 0.05%
ZSE Levy / Fee 0.10% 0.10%
VAT @ 15% on Brokerage 0.15% 0.15%
Capital Gains Withholding Tax 0.00% 1.00%
Total costs 1.73% 2.48%
Both sides 4.21%

Contract notes are issued within 24 hours after a deal but investors can request confirmation as soon as the deal has been conducted.

The ZSE is supervised by the Securities Exchange Commission (SEC). SEC is a statutory body established in terms of the Securities Act. Members of the ZSE are licensed by SEC, which also determines the level of capitalisation required for practicing members of the ZSE.

SEC has the power to intervene in the event that irregularities arise in the areas of conduct of licensed members, financial difficulties, and rejection of applications and/or termination of membership.

The following regulations apply to foreign investors:

  • Withholding taxes on dividends are deducted at source at the rate of 10%;
  • Repatriation of income and capital is free;
  • The maximum foreign investment is limited to 10% per investor and 40% collectively for a specific listed company;
  • and No prior exchange control approval is necessary for a foreign investor to participate on the ZSE.