The launch of C-Trade has significantly improved participation of small retail investors on the Zimbabwe Stock Exchange (ZSE) accounting for more than 50 percent of volumes in the first half of 2021.
Zimbabwe launched the C-Trade — an automated trading platform in 2018, which effectively opened capital markets to all and enhanced financial inclusion.
Escrow Systems, a subsidiary of Escrow Group provided the technology that also enables mobile and online share trading, becoming a first of its kind in Sub Saharan Africa region. Although values still remain low, C-Trade has been a significant volume pusher on the bourse and the trend is continuing in the second half of the year.
For instance, on July 27, C-Trade accounted for 69 percent of the total trades recorded on the ZSE, which was a new record for retail participation. Of the 651 trades recorded, retail participation via the mobile application accounted for 449.
Financial Securities Exchange Limited (FINSEC) general manager Garikayi Munema, said as operators of exchanges, there were more opportunities available to ride on technology to attract more retail participation and make capital markets a preferred investment destination for Zimbabweans. Finsec is Escrow Group’s subsidiary.
“People have not been participating on equities market, which is why we brought C-Trade which allows anyone to trade from anywhere using their mobile devices.
“Since its launch, we have seen an impressive improvement in retail participation, although the values are still low, it is encouraging to see retail investors using C-Trade account for more than half the trades on the ZSE,” said Mr Munema.
Prior to the launch of C-Trade, it is estimated that only around 7 000 individuals were active on the local stock markets. Institutional investors dominated trades on the bourse. But through the initiative, small retail investors, right up to the largest institutions can have direct access to the equities markets.
Mr Munema said prospects were high for the platform with plans to widen product range, while further increasing retail participation.
“Our intention is to keep the platform growing by extending products and connections to other payment platforms such as ZIPIT so that we can have more people transact more values.
“We want to see shares, exchange traded funds (ETFs), derivatives on the C-Trade app, to increase participation. We want to ride on technology which is convenient and enhances efficiencies of capital markets so that we lure more retail participation and boost financial inclusion,” he said adding more products such as derivatives were in the pipeline.
Mr Munema said they were looking at futures and optional derivatives targeting both retail and institutional investors.
Derivatives are financial instruments created and derive their value from an underlying assets such as gold or a group of assets. The most common underlying assets for derivatives are stocks, bonds, commodities, currencies, interest rates and market indexes.