November 18, 2024
OM ETF now highest demat counter on ZSE
THE Old Mutual (OM) Zimbabwe Stock Exchange (ZSE) Top Ten Index Exchange Traded Fund (ETF) is now the highest dematerialised (demat) counter on the local bourse, at 100 percent, Chengetedzai Depository Company (CDC) has said.
Demat is conversion from physical certificates to electronic book-keeping. In an update, CDC last week said 25 counters are now demat and the average penetration ratio is now at 51,27 percent.
“We are currently going through a process of acquiring top 20 shareholders in every counter from transfer secretaries and implementing a targeted approach to encourage major shareholders to dematerialise. All new listings are also being encouraged to insist on dematerialisation, like OM did with its ETF,” Campbell Musiwa, CDC’s chief executive told The Financial Gazette this week.
The ratio, which had largely remained static at 45 percent for more than two years, improved to current level after CDC embarked on various initiatives to encourage dematerialisation of shares by investors who are yet to deposit them onto the central securities depository.
Proplastics, which has a demat ratio of 98 percent, had over the years led the market, but it is now second to the OM ETF.
The Old Mutual Investment Group Zimbabwe-sponsored instrument, which was launched in December last year and started trading on January 4, was a first for the country.
According to CDC, only 10 companies have dematerialisation penetration ratios of over 90 percent — Masimba Holdings, Dawn, ART, ZHL, Seed Co limited, Ok Zimbabwe, BNC, RTG and FMP.
Musiwa says getting to full dematerialisation will result in a lower settlement risk, as well as less costs of servicing shareholders by listed companies.
Meanwhile, 539 accounts were opened with CDC’s Central Securities Depository (CSD) in February compared to 367 accounts opened in January 2021. This brought the cumulative number of accounts to 31 757.
Local investors now account for 94 percent of all the accounts, according to CDC. In February, a total of 129 deposits were processed on the CSD compared to 170 in the month of January 2021, bringing the cumulative number of deposits to 89 182.
