Archive for the 'Central Depository' Category
November 5th, 2012 by Tom Minney
According to news reports, the Board of the Zimbabwe Stock Exchange is close to negotiating an exit package with CEO Emmanuel Munyukwi, who was suspended in May. Board chairperson Eve Gadzikwa was reported by The Independent’s businessdigest that the board was in the process of concluding negotiations and an announcement is due in the coming week. ZSE operations executive Martin Matanda is acting chief executive.
Munyukwi has been CEO since 2001 but has been a key manager of the ZSE before that and was a valued colleague when this correspondent was running the Namibian Stock Exchange before 2000. The businessdigest suggests that although Munyukwi had been suspended on charges of alleged incompetence, currently the Board was negotiating an exit package with him and a figure of US$1 million was mentioned. Tony Barfoot, the previous CEO of the ZSE, was reportedly removed as consultant in April 2012, according to a report in Newsday.
There is no news on who will be the new head of the ZSE. It is possible that a potential candidate will be sought among Zimbabweans with experience of working in an automated and advanced securities exchange.
The Securities and Exchange Commission of Zimbabwe is reportedly working with the ZSE, introducing a central securities depository and electronic trading, with plans to automate the ZSE by March 2013, according to the news reports. One report says that SECZ has contracted a private company to develop a framework for establishing an electronic securities trading platform. State-owned ZB Financial Holdings has 13% of the CSD, National Social Security Authority 13% and Infrastructure Development Bank of Zimbabwe 10%, according to a shareholding agreement. The Expression of Interest tender for the CSD was published in 2010.
SECZ is also working with the ZSE on demutualization, although the ZSE is a private company more structural transformation may be possible. The tender for the advisory work on “ZSE Privatization” had a closing date of either March or September 2012, but the bidder was supposed to find their own funding for the work.
The Securities Act was amended in August 2012 to make SECZ more effective, extend its powers and give more protection to investors. This requires all securities exchanges in Zimbabwe to be companies, not mutual associations or other corporate bodies. There is a single Investor Protection Fund and the SECZ takes over regulation of asset managers and managers of collective investment schemes from the Reserve Bank of Zimbabwe. The CEO of the SECZ is Tafadzwa Chinamo.
Listings Executive Lina Mushanguri also told businessdigest that the ZSE is drafting a framework to set up a board for small and medium enterprises as part of the ZSE, which she said they would call it the “SMEs Stock Exchange”. This will have adjusted rules and regulations. The newspaper reports that income for the ZSE “last year” was $1.6m and expenses were $1.0 million, giving a surplus of $612,947. The ZSE website has been inoperative for many months and the ZSE annual report is not available online.
By 2 November the ZSE market capitalization had climbed back to $4 billion, after being below this for more than a year. It reached a high of nearly $4.3 billion in May-June 2011. Foreign investors contributed 80% of turnover in October, according to a report in the Standard newspaper.
September 4th, 2012 by Tom Minney
Months of hard work came to a climax when the Botswana Stock Exchange successfully launched its automated trading system (ATS) and now has live trading. This replaces the open outcry trading system and the aim is to make the BSE more visible and trading more efficient. The exchange has been using a central securities depository (CSD) since 2008 and this was upgraded alongside the implementation of the ATS.
The ATS was installed by MillenniumIT, part of the London Stock Exchange Group, after a BWP8.8 million ($1.1m) contract. MillenniumIT also installed the CSD.
The new system was implemented on Friday 24 August. The day before, Thursday 23 August, was a trading holiday, while Friday was a settlement holiday with trades settling instead on 27 August. These holidays were meant to enable the BSE to transition from the old CSD system to the upgraded version.
There is still a key target to encourage more shareholders to dematerialize their paper certificates and register them in the CSD for ease of trading. According to the BSE Annual Report, 46% of all domestic company shares and 91% of foreign company shares were dematerialized by December 2011, and so was the first corporate bond. In the annual report Chairman Patrick O’Flaherty notes “Along with the implementation of the ATS, our CSD (Central Securities Depositories) system is also being upgraded. This will ensure that the trading, clearing and settlement infrastructure of the BSE remains state of the art”.
In 2011 the BSE recorded average daily turnover of BWP4.1m. The volume of shares traded in 2011 was 458.7m, up from 308.7m in 2010. Letshego Holdings did a ten-for-one share split in 2010 and Furnmart and G4s followed suit in 2011.
INTERVIEW WITH HIRAN MENDIS, CEO OF BOTSWANA STOCK EXCHANGE
ACMN: What has the market participants’ reactions to the ATS?
HM: The response has been very positive. Automated trading is a completely new development in our market, but all market participants, particularly the brokers, have embraced the development and have basically hit the ground running. The amount of enthusiasm in the market is very humbling for the BSE.
ACMN: Were there any problems in the implementation?
HM: Apart from the normal day-to-day challenges that form part of any project, there were no major challenges. As the BSE, we had to work extra hard throughout the lifetime of the project to bring all stakeholders together and make sure that everyone is on the same page; that everyone understands and embraces the primary objective of bringing our market to par with other regional and international giants. Overall, it has been an extremely demanding but very rewarding experience for all stakeholders.
ACMN: Have you seen an increase in trading volumes?
HM: It’s still too early to say. In the first 2 days, it was quiet; probably because the traders were being cautious with the new trading platform. But turnover has since jumped back to previous levels.
ACMN: Are brokers now connecting from their offices (wide area network)?
HM: The brokers have been connecting from their offices since 2008 and this setup is still being used, even with the ATS. The networks have so far been very cooperative as we have not had any outages. The links that we have been using for WAN connectivity since 2008 have been very stable. On average, we have experienced less than 10 hours of downtime per year since 2008. About half of this downtime happened outside of trading hours.
ACMN: Can you give some technical details about the ATS and the CSD and their integration?
HM: The ATS is a trading platform, primarily responsible for accepting client orders, as input by brokers, and matching those orders on set criteria to produce trades. CSD system acts as a back-end for the ATS, handling the registry function for the ATS, together with clearing and settlement of all trades that happen at the ATS. For a client to be able to trade through the ATS, then they need to open a CSD account first. Communication between the systems is on a real-time basis and as clients buy/sell shares, their CSD account balances are updated in real time. The ATS is able to trade equity, debt, ETFs (exchange-traded funds), and GDRs (global depository receipts). Instruments that are currently actively trading through the ATS/CSD are equities and ETFs. Plans to include bonds are underway and CFDs will follow in due course. Trading currently happens from 10:30 to 13:30. The first trading session is an opening auction, followed by regular trading, then an interim auction session, then another regular trading session, which is followed by a closing auction session, and finally a closing price cross session.
ACMN: What future steps are planned – such as increased data flows, remote membership of BSE and direct market access?
HM: At this point we are more concerned with ensuring that that system continues to function according to expectations. Once the dust has settled and all stakeholders are comfortable with the system then the BSE will begin exploring availing market data in real-time to data vendors etc. After that, as a second phase of the automation drive, we will explore the possibility of Internet trading. As the BSE, we understand and appreciate that a wide spectrum of developments are now possible with an automated market. Funds and time permitting, we will build services around the CSD/ATS systems in order to turn our market into a true global player.
July 6th, 2012 by Tom Minney
The 10 stock exchanges of the Southern African Development Community (SADC) are working together to increase the effectiveness of their markets. The Committee of SADC Stock Exchanges (CoSSE) has agreed to concentrate on 6 priority areas in support of regional moves to more efficient capital markets.
The stock exchanges will explore ways to use technology to link their trading and order systems and work together to ensure clearing and settlement systems align with global standards adopted in April. They are working closely with SADC institutions to support development of regional systems, including payment and will boost visibility of trading data and enhance their joint website (www.cossesadc.org), launched in April by the JSE and I-Net Bridge. The bourses will also pool resources to accelerate training and skills development for capital markets staff.
CoSSE members are Botswana Stock Exchange, Malawi Stock Exchange, Stock Exchange of Mauritius, Bolsa de Valores de Moçambique, Namibian Stock Exchange, South Africa’s JSE Ltd, Swaziland Stock Exchange, Dar es Salaam Stock Exchange of Tanzania, Zambia’s Lusaka Stock Exchange, and the Zimbabwe Stock Exchange. They met on 25 June in Gaborone, Botswana in a meeting convened by CoSSE with support from SADC Secretariat.
“Stock exchanges have their roles cut out in each of our economies to augment our governments’ efforts to grow national economies for the greater good and as part of the SADC region’s struggle for growth to escape poverty,” says Mrs Beatrice Nkanza, Chairperson of CoSSE and CEO of the Lusaka Stock Exchange. “They are the channel for long-term risk capital, which is urgently needed for the region’s businesses, infrastructure providers and even governments. They also encourage saving and investment. CoSSE members are working closely together to support SADC initiatives and to make individual markets even more effective”.
CoSSE was set up in 1997 as a collective body of the stock exchanges in the Southern African Development Community (SADC). It promotes co-operation and collaboration between member stock exchanges and is resourced by a Secretariat, supported by the JSE. SADC defines CoSSE’s role in the Finance and Investment Protocol and other policy documents and CoSSE has links to ministerial and senior treasury bodies and also works closely with the Committee of Insurance, Securities and Non-Banking Financial Authorities (CISNA) and the Committee of Central Bank Governors (CCBG).
CoSSE had set up three working committees to implement six business plans, prioritized from the initiatives identified in its Strategic Plan 2011-2016. These are:
1. Legal and Secretariat working committee – chaired by Geoff Rothschild of the JSE. This is responsible for formalizing and resourcing the Secretariat, and for continuing and improving liaison with CISNA and other SADC organs.
2. Market Development working committee – chaired by Vipin Mahabirsingh of the Stock Exchange of Mauritius. CoSSE has been developing models for inter-connectivity between automated trading systems at some or all member exchanges. The working committee will help member exchanges ensure their clearing and settlement systems comply with new global standards and support regional initiatives.
3. Capacity-Building and Visibility working committee – chaired by Anabela Chambuca Pinho of the Bolsa de Valores de Moçambique. This will liaise with member exchanges, regulators, stockbrokers, investors and others to develop and coordinate training courses. It will also enhance the new CoSSE website, help members to upgrade their own websites and to ensure their trading data and company news are disseminated internationally.
Progress will be guided by an Executive Committee, consisting of CoSSE Chairperson Mrs Nkanza, CoSSE Vice-Chairperson Gabriel Kitua (CEO of the Dar es Salaam Stock Exchange in Tanzania) and the three working committee chairpersons. The strategic plan was developed with assistance from FinMark Trust.
For more information contact
• Beatrice Nkanza, CEO Lusaka Stock Exchange, tel +260 (1) 228391 or email nkanzab [at] luse.co.zm
• Gabriel Kitua, CEO Dar es Salaam Stock Exchange, tel +255 22 2135779 or email gabriel.kitua [at] dse.co.tz.
• Pearl Moatshe of CoSSE Secretariat, tel +27 11 5207118 or email pearlm [at] jse.co.za
April 24th, 2012 by Tom Minney
A new securities exchange in Lusaka (Zambia) is installing tried-and-tested bond and derivative trading software and says it will be ready to launch operations next month, May 2012. BaDEx has trading platforms that include spot and derivative trading in bonds, currency, commodities (such as derivatives on metals and silo certificates on the spot market) and a variety of other derivatives including agricultural commodities, precious metals, equity and energy.
There is also a central scrip depository system (CSD) with a separate core management, risk solution, surveillance and settlement systems and platforms. The CSD will apparently link to CSDs in South Africa, Europe and the US and with the central Bank of Zambia’s real-time gross settlement system.
BaDEx, also known as Bond and Derivatives Exchange, reports that it was licensed by Zambia’s Securities and Exchange Commission on 1 January 2012 and the licence covers all securities under the Securities Act – bonds, equity, derivatives and commodities. It has signed a contract effective 12 March with South Africa’s STT (www.sttsoftware.co.za, which has also provided the JSE’s bond trading software for many years), for STT to immediately deploy trading, clearing, settlement and surveillance systems, and systems for auctioning government securities that will be suitable for the central bank, among others.
Dominic Kabanje, CEO of BaDEx, told AfricanCapitalMarketsNews that the exchange is a public-liability company owned by “banks, pension funds and private companies including the major securities dealers in Zambia”. He says they started with 6 local stockbroking members (approach stockbrokers Madison Asset, Integral Initiatives, Intermarket Securities, Laurence Paul Investment Services, Pangaea Renaissance, African Alliance Securities for more information) but are also looking for remote members, working with a South African merchant bank.
Mr Kabanje said they are now doing primary listings. BaDEx will start secondary trading using an online, Internet-based platform when the systems go live and are also seeking to partner with an international clearing house. In a press release he said they had been excited for 18 months: “We are glad to have finally concluded and signed the contract with our software systems vendors. STT applications have been tried and tested in the South African financial markets at the Johannesburg Stock Exchange (JSE), who have used this software for the past 18 years.
“We are currently setting up a network of domestic and foreign-based settlement banks, local and remote foreign members and dealers, institutional underwriters, a clearing house as well as primary panels of domestic, regional and international investors. We plan to link up all willing domestic and regional banks, institutional investors, pension funds, treasury departments, the local central bank, the government debt management office and the local member brokers to our system by providing interfaces and online access to our platforms.
“We will also shortly join the international community of CSDs in South Africa, Europe and the United States initially to facilitate faster and smoother clearing of international securities transactions. The applications from STT and others will enable us to do this and in addition will allow us to compete internationally for bond and derivatives business”.
“I do not see any obstacles from the Zambian side for companies wishing to list. Even SA companies can list on BaDEx. We want Zambian companies to dual list on JSE and BaDEx. At BaDEx we are implementing SADC protocols on the free-trade area as well as enhancing intra-regional trade. An exchange is one such conduit for regional trade. We will, however, have to deal with the problem of exchange controls in SA.”
Michelle Janke, STT’s Managing Director, said the company was happy to reach further into SADC: “We have worked closely with the executives of BaDEx for more than a year, and the closely formed relationship will stand us in good stead over the coming months whilst we deliver all the software applications and prepare the new securities market in Zambia to go live. We hope that in due course through an ongoing cooperation between BaDEx and regional merchant banks we can assist in transforming Lusaka into a key financial hub within the SADC region. We will be there to make this happen operationally.”
Products to be traded include: corporate bonds, municipal bonds, currency futures and options, interest-rate derivatives (including swaps), equity derivatives and commodity derivatives on underlying copper, cobalt, gold, oil, wheat, soya and maize spot markets, bond derivatives market, spot bond market, spot and currency derivatives market, commodities derivatives (including metals) and the commodities spot markets (with silo certificates), agricultural derivatives market, spot equity and equity derivatives markets, precious metals derivatives market and energy derivatives market.
January 4th, 2012 by Tom Minney
Although the number of investors from other East African countries opening trading accounts at Kenya’s Nairobi Stock Exchange (www.nse.co.ke) is still very small, it is growing more consistently in the last 2 years than other categories of investors. According to data to 30 Sept released by Kenya’s Capital Market Authority (www.cma.or.ke), East African individual investors opened 97 securities accounts at Kenya’s Central Depository and Settlement Corporation (www.cdsckenya.com). This compares to 92 accounts opened in the full year 2010 and 79 in 2009.
By comparison Kenyan individual investors only opened 27,669 accounts in the 9 months to September 2011, compared to 120,756 accounts opened in 2010 and 52,836 in 2009. Kenyan equity trading has remained subdued as investors say high interest rates make them choose government debt securities over equities.
One potential reason for the East African interest, according to an article in the East African , is that Ugandans are opening trading accounts at the NSE in anticipation of the IPO of electricity distributor Umeme (www.umeme.co.ug) scheduled for 2012. Umeme is expected to cross-list at the NSE and the Ugandan Securities Exchange (www.use.or.ug). Some investors open multiple accounts ahead of a potentially “hot” initial public offering (IPO) of shares, where they hope to sell their initial allocation quickly and make a quick profit, as this is likely to maximise their share of allocation if the IPO is oversubscribed.
Trading experience shows that cross-listed East African shares such as Centum, Kenya Airways, Jubilee Insurance, trade more on the NSE compared with the Dar es Salaam Stock Exchange (www.dse.co.tz) and USE. The increased liquidity in Nairobi means that East Africans are better off having a trading account at the NSE. The paper comments that Rwandans, Tanzanians and Ugandans are probably realising this fact and also taking positions ahead of the listing of some of their firms on the NSE by opening more CDS accounts in Nairobi: “Investors will go the extra mile to open and operate, as proxies, CDS accounts in the names of their relatives or friends who know nothing on trading in shares. Expect an influx of Rwandese, Tanzanians and Ugandans at the NSE in 2012.”
September 5th, 2011 by Tom Minney
Interest in share offers is high in Rwanda, after shares of Bank of Kigali (BK) rose 52% to RWF190 in their first day of trading on 1 September. The Initial Public Offer (IPO), which opened on 30 June and ran for a month, offered the shares at RWF125. According to today’s market report (5 September) total trading today was 5 deals in BK shares which ended at RWF172 (it closed on Friday at RWF 191) and in brewer BRALIRWA which was unchanged at RWF246.
The BK shares offered included a sale by the Government of its 20% stake and the bank offered a further 25%, making a total offer of 300.3 million shares for a total value of RWF37.5 billion ($63.6 m). This was 274% oversubscribed with Rwandan investors making up 75% of the shareholding. The retail investors’ pool was oversubscribed by 291%, institutional investors from Rwanda 165%, institutional investors from the region 221%, international investors 330% and BK employees and management 135%, according to a report in the East African newspaper.
The bank plans to use the IPO funds to expand its network including opening 44 branches in 2011, increase the loan portfolio and consolidate its leadership position in the increasingly competitive banking industry. The listing should also boost activity on the young RSE, Africa’s newest stock exchange which was launched on 31 January
Lado Gurgenidze, chairman of the BK board, is reported in New Times newspaper saying: “The transaction and new capital comes at the right time when the bank is focusing on building a great bank and retaining the leading position in the market. Through great service and 45% of the shares being in the hands of the public, we have all the reasons to be optimistic that it will be very liquid on the secondary market.”
Investors waitng for more offers
It is the fourth listing on the RSE. When it launched in January it immediately started trading the shares of the first domestic IPO, brewer Brasseries et Limonaderies du Rwanda BRALIRWA (www.bralirwa.com). This had been offered at RWF136 and started trading at RWF220. The other two counters are cross-listings from Kenya: Kenya Commercial Bank and Nation Media Group.
Reuters reports that appetite for shares is likely to be strong, partly because of the favourable pricing. The BK shares were offered at a multiple of 1.4x book value, a 15% discount to Kenyan banks at the time of the sale. The article quotes Nkoregamba Mwebesa, managing director of CFC Stanbic Financial Services in Kenya, saying: “Being a government exit, the Government is able to offer a discount which will attract (investors). We should continue to see appetite for all that. Rwanda is also stable politically, and that encourages investors as well. When the Government is exiting they don’t care about dilution. They are not out to really make money. The agency reports that market players said the main aim of the government was to help kick-start the bourse.
Future share offerings are likely to attract sustained interest, including government plans to sell a 20% share in the country’s biggest insurer Sonarwa (Societe Nouvelle d’Assurance du Rwanda – Nigeria’s IGI owns 35%). It is also hoping to sell shares in what Reuters called “an unidentified cement firm”, although earlier this year Ciments du Rwanda Ltd was mentioned.
Government has also held talks about selling its 10% stake in telecom operator MTN Rwanda. MTN Group is majority shareholder and has the right of first refusal on any share sales. John Rwangombwa, Minister of Finance and Economic Planning, reportedly said earlier this year: “We have two options; if MTN gives us (Government) the price we want, we will sell the shares to them directly while the other option is through an IPO depending on the other investor.” (as reported on this website)
The Minister had also said that Government would sell more of its stake in BK later. It owned 66.3% before the offer.
T+2 settlement here, electronic trading “by June”
On 3 August the RSE announced that it was adopting a T+2 settlement cycle for all securities with effect from 5 August. Sellers of securities receive money and transfer of ownership is effected on the third day. This replaced T+5 for equities and T+3 for bonds. The new system was made possible after the Central Bank of Rwanda (BNR) introduced a modern payment system, the Rwanda Integrated Payment and Processing System (RIPPS), which offers real-time gross settlement (RTGS), an automated clearing house (ACH), an automated transfer system (ATS) and a central securities depository (CSD).
Reuters reported that the next step would be electronic trading and other steps to attract more stock and debt issues. Robert Mathu, chief executive of Rwanda Stock Exchange, was reported as saying: “We are hoping to put in place an electronic trading platform by June next year.”
September 4th, 2011 by Tom Minney
A company has been engaged to supervise the transition of the Zimbabwe Stock Exchange to electronic trading. A document on the change has been presented to Cabinet and issues around setting up a Central Securities Depository including the shareholding structure. According to a report in the Government’s Herald newspaper, Finance Minister Tendai Biti told a breakfast meeting organized by the Securities and Exchange Commission of Zimbabwe and the ZSE that the CSD could be in place by year-end.
The aim is to improve stakeholder relations and explore possibility for other capital or financial markets to be set up. Minister Biti said the CSD was a critical part of a modern capital market system as it reduced the payment cycle, enhanced transparency and helped monitor the shareholding thresholds of foreign investors participating on ZSE.
He said that the CSD would help prevent irregularities. Apparently the minister said that currently only about 20 investors accounted for most of the trading in the 79 listed counters. He claimed that the CSD will improve liquidity, promote market integrity and transparency while minimising market manipulation, fraud and financial crime.
According to a report in a South African newspaper called “Sunday Times Zimbabwe”, the Minister would also like to modernize the ZSE Act and the Securities Act and possibly introduce a “super regulator”, similar to the UK’s Financial Services Authority (in June 2010 the UK Government announced plans to abolish the FSA and split its functions). This report claims that 20 of the “shadowy players” were virtually controlled by the same individuals, and Renaissance Financial Holdings Limited was accused of wrongdoing because of insufficient measures to detect insider dealings.
According to the Herald, the Minister said: “The main issue being dealt with is the shareholding structure of this systematically important institution (CSD), which should reflect national ownership by both the public and private sector players.” He said that the National Social Security Authority, the Reserve Bank of Zimbabwe or the ZSE would own at least 51% of the CSD company. Another significant shareholder will be Chengetedzai, a local private firm which is overseeing the establishment of the electronic trading system (the website http://chengetedzai.com/) appears to be just a title page.
The government seeks to demutualise the bourse, which it believes will enhance accountability and speed modernisation. Currently the bourse is still an association of stakeholders while demutualization would mean turning the exchange into a company driven by the profit motive or other goal. Minister Biti said demutualisation was critical to prevent cartels of members from dictating the affairs of the bourse, which created credibility crises and could put off investors. There has long been tension between the ZSE and the SEC over jurisdiction and self-regulation.
ZSE trading is done in daily “call-over” sessions when brokers gather around a table and bid against each other. However, trading is more active than on many more automated neighbouring exchanges.
According to the report, the Minister said: “When you go to the Zimbabwe Stock Exchange and see the way they trade it gives the impression that we are still stuck in 1950. It is as if someone pressed a pause button on the TV and everything stopped. We have to modernise and part of it is coming up with a CSD,” he said.
SECZ chairperson Mrs Willia Bonyongwe said the country wanted to set up more securities and capital markets and challenged innovative Zimbabweans to come forward with proposals. She suggested markets could assist in trading equities, bonds, quasi or hybrid financial instruments, asset securitisation and unitisation, hedging or risk commodity markets and private equity instruments, or even trade in agriculture and mining products. The ZSE is the only active capital market.
In early August the ZSE website (www.zse.co.zw) was hacked twice in early August and used phishing and has currently disappeared.
February 14th, 2011 by Tom Minney
The Egyptian Exchange (www.egyptse.com) has decided to postpone its reopening until Wednesday 16 February. The stock exchange, based in Cairo, closed on 27 Jan after the main EGX 30 Index fell 16% in a week, and was due to open again yesterday (Sunday 13 Feb). The decision to delay the opening comes on the back of talks with regulators, stockbrokers and the Misr for Central Clearing, Depository and Registry (MCDR, www.mcsd.com.eg).
When the exchange reopens steps are expected to be in place to stop precipitous falls and price fluctuations. Many foreigners had sought to take out money and it is not yet clear how sentiment will shape up following the resignation of former President Hosni Mubarak on 11 Feb and the army take over pending democratic elections scheduled for six months time. The EGX says it is working on technical requirements needed to start trading as well as procedures to be used as soon as the trading begins. Telecommunications and Internet services may also have been disrupted.
The Wall Street Journal reported yesterday (13 Feb) that late yesterday the Central Bank of Egypt (www.cbe.org.eg) said that banks in Egypt will close on Monday and Tuesday due to workers’ strikes and the birth of Prophet Mohammad. Its emailed statement reads: “Amidst the strikes of worker in some authorities, including public banks … the central bank has decided to close banks on Monday Feb. 14 and Tuesday Feb. 15 on the occasion” of Prophet Mohammad’s birth.
Meanwhile schools and universities were reported to be reopening over the past weekend and many industries had said they were back and working close to normal by 7 Feb.
October 15th, 2010 by Tom Minney
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September 28th, 2010 by Tom Minney
Kenya’s Central Depository and Settlement Corporation (www.cdsckenya.com) continues to expand outside the borders of Kenya, buoyed from its 2008 triumph with the region’s biggest initial public offer, Safaricom. Recently, Business Daily newspaper (www.businessdailyafrica.com) reported that CDSC has submitted a bid to offer consultancy services for setting up an electronic share depository for the Zimbabwe stock market.
According to the report, the CDSC issued a statement on 21 September, that it had submitted a proposal to the Zimbabwe Securities and Exchange Commission “to provide advisory services” in the intended implementation of an electronic share registry similar to the one introduced in Kenya in 2004.
The statement read: “Such services have been previously provided by CDSC to the Uganda Securities Exchange, and discussions are ongoing for the provision of similar services to the capital market in Rwanda.” CDSC also recently won the tender to provide registrar services for the BRALIRWA Initial Public Offering (IPO) in what will be the first local listing and share offer for Rwanda’s over-the-counter securities market.
CDSC is privately owned by the Capital Markets Challenge Fund (50%), Nairobi Stock Exchange (20%), AKS Nominees (18%), Capital Markets Compensation Fund (7%), Uganda Securities Exchange and the Dar-es-Salaam Stock Exchange (2.5% each).
Chief executive officer Rose Mambo denied recent reports which said the CDSC was experiencing financial difficulties. She said it: “..made a profit in 2009 and maintained a strong financial position… 2008 was a good year boosted by high turnover as a result of the Safaricom IPO, so the reports of a slump are inaccurate.”.
CDSC receives a 0.06% commission on all trading done at the Nairobi Stock Exchange, where market turnover was KSh97.52 billion ($1.2 billion) in 2008 against trades of KSh88.17 billion in 2007, boosted mainly by the Safaricom IPO which pumped Sh50 billion worth of shares in to the market and attracted 750,000 individual applicants. Its revenues (turnover) declined after foreign investors reduce their trading at the NSE in the storm of the global economic crisis.
Ms Mambo was reported as saying CDSC’s income from trade commissions in 2009 was KSh38.1 million (US$473,535), a drop from the 2008 turnover of Sh63.6 million. The regional push is meant to increase its sources of revenues after a 2-year slow-down at the NSE reduced earnings from trading commissions, which is the core revenue source for the company.
The newspaper says the NSE had 1.4 million accounts in the Central Depository System (CDS). In addition, the CDSC also acts as a clearing house for market transactions. The system introduced 6 years ago made it possible to transfer and register securities in electronic format without the necessity of physical certificates. This had an immediate impact of increasing number of shares traded at the bourse from 380 million in 2003 to about 5.8 billion in 2008, according to CDSC data. The company also aims to cut operational costs by substituting paper-based statements for text and e-mail statements.
According to the report, Rwanda also has six more listings in the pipeline.