Tinashe Makichi Business Reporter
Imara Edwards Securities has launched a drive to speed up the de-materialisation of shares held by its clients. The Zimbabwe Stock Exchange recently created a central scrip depository system to manage the transfer of paper-based securities into digital format (de-materialisation).
Imara Edwards Securities, which is part of the pan-African Imara financial services group, has applauded the ZSE and the Securities Commission of Zimbabwe as it brings the exchange into line with its peers in a growing number of countries while bestowing numerous practical advantages.
Like with any start-up company, CDCL has seen a few glitches along the way but the firm said its large number of international clients had been particularly pleased to see the move to paperless systems as this had long been the practice in major markets.
Imara executive director Mr Tino Kambasha said “De-materialisation largely removes risks associated with faked, forged or stolen shares while speeding up administrative processes. Investors also save money and no longer have to engage in tedious paperwork. For administrative purposes, you deal with one single depository instead of each company in which you have a stake.
“In the short term we’ll see a decrease in volumes as a drive to educate investors is undertaken, but in the long term de-materialisation will help to foster the growth of local capital markets as so-called ‘demat shares’ tend to be small investor friendly. International experience shows that these investors can buy and sell smaller lots of shares at prevailing market prices once demat comes in.”
Mr Kambasha said many of our clients have already set up accounts linked to the CSD system and submitted physical shares for de-materialisation. By early November, the ZSE had brought about 27 companies shares into its CSD system. Imara Edwards Securities called on all categories of clients to engage in the process, even those with shares that have yet to be covered by the CSD system. Individual and corporate clients, pension funds, trusts, clubs, societies, charities and other bodies have all been notified of the new system.
Administrative requirements differ across client categories before shares can be submitted for dematerialisation. Mr Kambasha said, “All requirements have been communicated and our staffs stand ready to assist clients with the process. We expect the vast majority of our clients to move to the new system in the near future.”
Imara is an independent, Botswana-listed investment banking group that prides itself on objective decision-making in the service of its clients.
The company is mid-sized and has offices in Angola, Botswana, South Africa and the UK and associate offices in Malawi, Mauritius, Zambia and Zimbabwe.