Interesting trading facts on the ZSE

We all saw it coming but the big question was when will activity return to the local bourse? With trade having resumed on Thursday after the intervention on the new minister of finance and having agreed to the following with the ZSE Committee:

(1) TARIFFS

Purchases: Brokerage 2% (Committee wanted 1% but the Minister wanted 2% to boost VAT)

: Stamp Duty 0.5%

: VAT 15% of brokerage

Analysts say that to boost tax revenue, it would have been more efficient to raise the stamp duty to over 0.65% and reduce the brokerage to 1%.

Sales : Brokerage 2%

: VAT 15% of brokerage

(2) FUNGIBILITY

Fungibility restored for all dual listed companies. The RBZ will be advised of the change.

(3) ASSET MANAGEMENT COMPANIES

ZSE Committee suggested that asset managers be brought under SEC so as to share burden with them in funding SEC and in line with international practice. The RBZ will be advised of the change.

. The question now is will the shares find buyers’ considering the market seems all but a seller’s market with only Apex trading on the opening day at US1c.The other question that is still to be answered could the valuation of some counters on the bourse while the other would be also the issue of liquidity to support trade.
While these may sound to some as petty they remain concerns of some investors because some investors had traded their forex for local currency to buy stock ,let’s say US$2000 but when trade resumed the value of the stock is now at less than US$300 that’s a loss of US§1700 with no trade taking place at all.
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2009 Budget Proposals

Reduce inflation to 2 digit figure and realise Economic Growth of 2% in 2009

Rather ambiguous given the degree of collapse of the economy and work needs to be done
Total Revenue to be estimated at 30% of GDP(US$5.5billion)

US$1.7 billion

Dual currency (use of multiple foreign currency alongside the ZWD)

ZWD Revaluation

CSO adoption of US$ Statistics in Inflation calculations

Dollarization has been formalised

A stop on the Quasi fiscal expenditures

Help to rein inflation, however policy consistence remains to be seen

Remuneration of Public Servants in Foreign currency starting February 2009

Voucher (problem in determining consumption pattern of consumers)

Move away from Voucher system if inflows permit

Allows the private sector to follow suit

Exchange is expected to be market determined

Complimenting fiscal policy

Insurance

Given licences to charge in foreign currency

7.5% of US$ assets in PA (long term insurance)
5% of US$ assets in PA( short term insurance)
10% of US$ assets in PA( pension funds)

Local currency

Ratios of 35%,30% and 25% remain in place

High appetite for US$ PA paper

Cash rich

ZSE Trading

Measures to be put in place soon to trade in foreign currency
Activity likely to be depressed as national savings level still depressed

Local Authorities to charge in Foreign currency

NOCZIM

ZESA

US$0.098kWh
Farmers , pay 80% of the tariff

ZINWA

Management of water to local authorities (1 Feb 2009)
Effective and possible efficiency to be realised