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Reserve Bank Implements Automated Trading System for Malawi Stock Exchange

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The Reserve Bank of Malawi (RBM) has implemented Automated Trading System (ATS) for Malawi Stock Exchange which is linked to its Central Securities Deposits (CSD), which keeps details of the securities unlike in the past when trading and recording of securities was all manual.

Also present was CAMA Executive Director John Kapito and Boby from National Bank Kabambe mpasises that a cashless society is possible The delegates

This was disclosed by RBM Governor Madalitso Kabambe on Wednesday during a conference at Sun ‘n’ Sand in Mangochi where RBM gathered digital financial service stakeholders to appraise them on its drive to to accelerate the shift from paper based payments instruments, such as cash and cheques to electronic based services.

Kabambe said the CSD is linked to the world-class national payments system called the Malawi Interbank Transfers and Settlement system (MITASS) to cater for settlement of the securities market.

MITASS is linked all commercial banks through which all transactions; high or low value, are processed in real time and designated time intervals.

“All these systems shall at some stage be linked to regional systems such as SADC-RTGS for SADC and REPSS for COMESA,” Kabambe said.

“In a bid to ensure efficiency and effectiveness of the payments systems, the Reserve Bank of Malawi issued the Interoperability Directive in 2017 under the Payment Systems Act of 2016 which ensures that individuals have access to any ATM and point of sale devices through the National Switch (Natswitch) other than be restricted to payment channels provided by their respective banks.

“The regulatory framework is also focusing on consumer protection issues so that users of payment services, be it individuals or business entities, get value for money.

“In addition, the Reserve Bank of Malawi issued the E-money Regulations in June 2019 to among others, provide a regulatory framework for provision of e-money services in the country.

“This Regulation is expected to improve the safety and efficiency of e-money services by providing minimum technical and operational requirements and also minimum standards on customer protection and protection of customer funds which is key for building confidence in digital financial services.”

He added that to increase consumer convenience and experience, Government has gazetted the Regulations on Deployment and Usage of Electonic Payment Channels by all licensed businesses in the country.Close

“Under this Regulation, some sections of the business community will be required to have at least one or more digital payment channels so that customers that are willing to pay electronically should not be inconvenienced.

“As a result of all these tremendous improvements in the payments architecture and the enabling legal and regulatory framework, Malawi has seen the number of bank accounts more than doubling within one year from 1.3 million in January 2018 to 2.6 million as at end of December.

“The number of subscribers on the non-bank mobile money platforms has also increased from 3.6 million in 2016 to 7.0 million as at end of June 2019.

“Likewise, the volume of non-bank mobile money transactions has also risen exponentially from 87.3 billion in 2016 to 122.3 million as at end June 2019 with a corresponding in crease in transaction value from K303.8 billion in 2016 to K710.1 billion as at end June 2019.

“Overall, transactions processed in all digital financial platforms increased by 104.8 percent in volume from 105.4 million in 2016 to 215.9 million in 2018 while the corresponding value increased by 173.5 percent from K1.24 trillion in 2016 to K3.4 trillion in 2018.”

Read the original article on Nyasa Times.

Seed Co shareholders to receive dividends via C-Trade

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Shareholders of Seed Co International Limited can now receive their dividend payments below US$10 through the C-Trade platform as a way to enhance ease of transacting and cut costs.

However, Seed Co International shareholders with dividends above US$10 have an option to have their dividends deposited in their C-Trade accounts or to provide local US$ FCA Nostro Investment account details or local RTGS account in order to receive their dividend. The initiative comes as efforts to address challenges related to payment of small dividend amounts below US$10.

“Seed Co International Limited shareholders are advised that due to operational challenges related to payment of dividends below USD10, Seed Co International Limited hereby gives shareholders an option to receive their dividends through the C-TRADE platform,” said Escrow Group, head sales and marketing Eliah Sarayi.

C-TRADE is a mobile and online platform for the trading of securities on Zimbabwe’s capital markets and allows access to full trading functionalities for the Financial Securities Exchange Limited (FINSEC) and the Zimbabwe Stock Exchange (ZSE).

Last year Zimbabwe launched the C-Trade, which effectively opened capital markets to all and enhance financial inclusion.Escrow Systems, a subsidiary of Escrow Group, provided the technology that enables mobile share trading. According to Escrow, C-Trade enables investors an opportunity to accumulate small dividends and participate on ZSE and Finsec anywhere at any time as well as access to shareholder portfolio information.

Mr Sarayi added receiving dividend payment via C-Trade enables investors to accumulate their funds on the platform which they can later convert to local currency for withdrawal. Investors also have an option to accumulate the funds on the platform and purchase more shares, for other counters as well. “Moving small amounts like US$10 and less is a challenge in itself. But if the funds are deposited into a C-Trade account, it is an advantage. You can let that money accumulate for later withdrawal. “This can also be an investment strategy within the C-Trade, you can purchase more shares, not only Seed Co shares in this case but it is an opportunity to diversify your portfolio,” said Mr Sarayi.

Shareholders are therefore required to have the C-Trade mobile application on their devices in order to open and activate accounts giving them access to their C–Trade portfolio, view foreign currency dividend, buy shares or convert the money to local currency for withdrawals. Last year, the seed manufacturer unbundled 71 percent of Seed-Co International, which was represented by 242 million ordinary shares. On completion of transaction, Seed Co Limited retained 26 percent stake in Seed Co International. Seed Co International then listed on the Botswana Stock Exchange (BSE).

Enacy Mapakame Business Reporter

JSE agrees to acquire majority stake in share registry Link Market Services South Africa

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JSE Limited, the operator of the Johannesburg Stock Exchange (JSE), Africa’s largest, multi-asset class stock exchange, has agreed to acquire Link Market Services South Africa (Pty) Ltd (Link SA), the second largest share registry business in South Africa (with 6 of the top 40 listed companies as clients), subject to all required approvals, for a cash amount of R224,5m.

JSE Limited will acquire a 74.85% shareholding in Link SA with Link SA’s Black Economic Empowerment (BEE) shareholder retaining the remaining 25.15% and the Link SA CEO, Iqbal Haniff, remaining as CEO of the company.

The acquisition will see Link SA being merged into the JSE Limited structure and operated independently under a newly formed business stream, subject to all required approvals. This proposed acquisition comes after many engagements with the JSE’s listed companies’ which have expressed a desire to drive synergies and consolidate how they service their shareholders through a one-stop-shop.

The proposed transaction is revenue accretive with an expected contribution of up to 6% of Group revenue, while exceeding the Group’s return on investment hurdles. This demonstrates that even in tougher economic times there are opportunities where the JSE can make a difference to its clients by thinking creatively and working hard to deliver that difference. This also presents opportunities for both listed and unlisted companies to use these services.

Through Link SA, the JSE intends to introduce end-to-end products and services to JSE listed companies, making it easier for them to communicate and understand their shareholder base. These services include shareholder register maintenance, corporate actions, shareholder analytics, managing BEE share schemes, electronic communication and voting, and training and educating shareholders. The transaction will enable the JSE to diversify revenue and extend the services it already offers listed companies through its Company Services team, which includes training, investor relations support and listed company annual, and interim results presentations hosting and meeting support.

JSE CEO, Nicky Newton-King say’s “We are continuously having conversations with our clients on how we can better meet their needs and add value. The JSE is well placed to engage in order to fill a crucial gap in the market and to collaborate with our listed companies to educate and look after their shareholders end-to-end. We look forward to this transaction strengthening our relationships with our listed clients and helping to build a stronger and more engaged shareholder base for our issuers which is so important for real inclusive growth in our country.”

John McMurtrie, Link Group Managing Director, says “Link SA has established itself as a leading share registry in the South African market and we strongly believe the partnership with the JSE will add value to the business. Link SA will remain a key member of the Global Share Alliance and we look forward to continuing our relationship with the business and with the JSE in the future.”

Written by JSE


BVM Evaluates Its Medium Term Strategic Plan (2017-2021)

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On July 24 of the current year, the Mid-Term Review of the BVM Strategic Plan (2017-2021) was held in Maputo. Where the state of play of actions and initiatives developed by the BVM and the follow-up of the activities to be carried out were presented. carry out by 2021, including the exercise of identifying the aspects to be improved in order to boost the stock market in Mozambique.

On the occasion, the BVM PCA, Salim Cripton Valá informed that of the 22 initiatives of the Strategic Plan, 11 were carried out and concluded with positive results (50%), 10 are still ongoing (45%), and one (1) started but is on time, representing 5%.

It also highlighted some indicators, namely the fact that 9 companies are listed, thus experiencing a 125% growth over the last two years, the market capitalization is 103,066 million MT (U $ D 1,657 million), the market capitalization ratio stands at 10.1% of GDP and projected to 21% by 2025. The average of the last two years of turnover was 3,900 million MT, the BVM financed the economy of 119,184 million MT ( $ 1,916 million), and to date 154 titles are listed.

On the occasion, Valá announced that BVM will have the Stock Exchange Index, and that it will be useful for investors, because it will allow them to follow the behavior and trends of the stock market. “The stock index helps gain greater national and international exposure, broadens the visibility of the stock market, attracts foreign investors to the stock market, and will bridge a gap in compliance with the SADC Finance and Investment Protocol.” Other exchanges such as Johannesburg, Namibia, Zimbabwe, Malawi, Tanzania, Botswana, Zambia and Mauritius, for example, already have stock indices, ”Valá added.

Investors and other economic agents will have IBVMGlobal, IBVMAcções and IBVMObrigações available on a daily basis. This way, the Mozambican and non-resident investor will have relevant and up-to-date information on the market, as has long been the case with users of the New York, London, Tokyo, Hong Kong, Shanghai, Johannesburg stock exchanges, among other financial markets. of reference.

In turn, FSDmoc Executive Director Esselina Macome reiterated that FSDMoç’s support to BVM has been made possible by funding from the British and Swedish Governments, which demonstrate their commitment to capital market development and is a priority on the agenda. donor vision and programs, improve levels of financial inclusion in the country by establishing partnerships and strategic interventions that promote greater inclusion of disadvantaged / excluded groups, specifically women, youth, small-scale producers and micro , Small and Medium Enterprises.

“In collaboration with the BVM, we have observed a proactive nature of this institution, and for this reason, I would like to commend the progress made in the last two years since the launch of this instrument, especially the dissemination campaigns, the review of SME listing requirements. and the increase in the number of companies listed on the stock exchange ”. said Esselina Macome.

In another development, Kabir Ibrahimo, CTA Vice President who spoke on behalf of CTA, praised BVM’s progress, but suggested legal reforms to allow greater adherence to the Stock Market. For CTA, it has been noted that SME adhesion to the Second Market is still very weak, and pointed out as a cause of this the low level of financial education and the weak corporate management capacity of companies.

According to Hibrahimo, the costs of admission, readmission and maintenance of securities on the stock exchange, the taxation regime applied to transactions carried out in this market segment, can create a disincentive for SMEs to join the stock exchange, mainly because the cost and taxation variables constitute generally one of the main obstacles to the development of the Mozambican private sector.

However, the CTA proposes the implementation of some reforms, such as the revision of the BVM Second Market Regulation, no. 2 / GPCA / BVM / 2010), to allow the reduction of fees, as well as the revision of Articles 57 and 67 of IRPC code and IRPS respectively, to allow for the introduction of a special tax regime for the second market which guarantees the reduction or exemption from the payment of the liberalization rate in transactions carried out in this market segment.

On behalf of the Ministry of Economy and Finance, Rogério Nkomo said that the actions taken by BVM are aligned with the objectives set out in the government’s strategic instruments, namely the Strategy for the Development of the Financial System 2013-2022 and the National Strategy for Financial Inclusion. 2016-2022. “The capital market is making a significant contribution to the country’s economy by promoting actions and initiatives.