Sub-custody guide: Zimbabwe
The Zimbabwe CSD was launched in September 2014, which will
actively enhance the growth in assets under custody for sub-custodians. Going
into 2015, the CSD expects to shorten the settlement period from T+5 to T+3
business days. The CSD will also explore the introduction of straight through
processing (STP) with custodians’ back-office systems.
The Reserve Bank of Zimbabwe (RBZ) amended exchange control
regulations in 2014, allowing foreign investors to participate in both primary
and secondary markets for Zimbabwean treasury bills, treasury bonds and
corporate bonds.
Market share for sub-custody is dominated by two
international banks with local players focusing on direct custody to local
pension funds and asset managers. “More local banks are expected to launch
custodial businesses in 2015 in order to take advantage of the growth
opportunities,” says Takunda Magumise, head of investor services, Stanbic Bank
Zimbabwe.
Foreign investors account for more than 60% of the turnover
on the Zimbabwe Stock Exchange (ZSE). “We expect markets to stabilise in 2015
as ZSE valuations seem to have incorporated the market’s perceptions on
political risk,” says Magumise.
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