Zimbabwe Stock Exchange is working on an online trading platform – think of C-Trade and you’ll have a good idea of what they have in mind. Their online trading platform will be available on the web (and eventually as a mobile application) is expected to launch in July.
ZSE is launching this platform because in their view such a platform will make it easier for retail investors to trade in a market where activity by institutional investors has far outweighed that of retail investors. ZSEs view isn’t far fetched as we saw C-Trade managing to acquire 8900 first-time retail investors in less than half a year in 2018.
Apart from increasing participation of retail investors, ZSEs Head of Products Anymore Taruvinga mentioned that developing this platform will give them flexibility to experiment on marketing and other promotional strategies.
When you consider that ZSE also introduced online courses aimed at teaching the ordinary man/woman how to invest earlier this year one can envision a scenario where ZSE is able to promote their trading platform within their online course.
After learning how to invest, the same company then offers you a place to go and practice what you’ve learn. In my view, that is a sound strategy for acquiring first-time investors.
What will ZSEs platform offer that’s different to C-Trade?
The platform is still in development as mentioned above but in our communication with ZSE reps Anymore, and Head of ICT Ezekiel Mukanga did highlight a few features that we can expect to be executed differently from C-Trade.
ZSE says their approach to design will be friendly to first-time investors providing a guided process along with summary explanations. In our initial criticisms of C-Trade’s sign-up process, we complained about how clueless many first time investors would feel when setting up an account on the platform. If ZSE can make that process clearer as they promise that will no doubt be a welcome improvement to the alternative offered on the market.
ZSEs platform is linked to the Central Securities Depositories and will allow investors to check how many shares they’ve accumulated over time.
Finally, Stockbrokers will be able to approve clients trading under their name which ZSE says will help with Know Your Customer (KYC) compliance and Anti-Money Laundering (AML). This will also “cement the relationship between the client and the stockbroker and helps when the client requires advice from the selected broker.”
The development of such a platform is exciting news. Hopefully, ZSEs solution will offer healthy competition to C-Trade who took the first step in offering such a service but I feel they didn’t build on it as they should have considering the momentum they had early on.