THE STOCK MARKET IN ZAMBIA

27 Nov

THE STOCK MARKET IN ZAMBIA

The stock Market is a place where stock (shares and debt) can be traded(bought and sold). It can be further divided into the
(i) Primary market- where stock being issued for the first time is traded. There are two circumstances when this occurs
1. When a seasoned issue is made.
2. When an Initial Public Offer is made.
(ii) Secondary market-where stock that has already been issued and is being resold is traded.

WHY ZAMBIA AND LuSE

In Zambia, the Lusaka Stock Exchange acts as the stock market. It is a lucrative market to invest on because the country in which it is located (Zambia) is peaceful and quiet stable politically. Zambia is a landlocked country with a population of around 12.5million. The companies that operate in Zambia have in the recent past benefited from favourable tax policies from the government. For instance, retail chain store, Shoprite had a tax holiday for some years when it established operations in Zambia. The country also has Multi Facility Economic Zones (MFEZ) which are areas in the country where companies are subject to more favourable tax conditions than the normal taxes elsewhere in the country.

SOME LISTED COMPANIES

The Lusaka Stock exchange was formed in 1993 and became operational in 1994. Some of the companies that are Listed on the Stock exchange include; African Explosives Limited (AEL), British American Tobacco (BAT), Beyond Petroleum (BP) Zambia, Barclays Bank Zambia, Lafarge Cement (Formerly Chilanga cement) and many more.

REGULATORY FRAMEWORK

The Stock market in Zambia is regulated by the Securities Exchange Act which also led to the formation of the Securities Exchange Commission of Zambia. Some of the provisions of this Act are that;
(i) Every stock market should be registered as a Stock exchange with the Securities Exchange Commission.
(ii) Every member of the Stock exchange must be registered with the Securities Exchange Commission.
(iii) A compensation fund must be established to refund investors who incur losses due to fraudulent acts by registered members of the Stock exchange. This provision is aimed at increasing investor confidence in the stock market as anyone defrauded may have the assurance of having their funds back.
(iv) Members of the stock market are not supposed to engage in insider trading or fraudulent acts.

STOCK BROCKERS

In order to buy or sell shares on the Lusaka Stock exchange, you need to approach a stock broker. Stock brokers are people or organisations who act as a link between the investors and the Stock market. There are three major stock brokers in Zambia, these include;
(a) Stock brokers Zambia limited.
(b) Inter-market Zambia limited.
(c) Pangaea stock brokers.
So are you ready to invest in Zambia, Visit the lusaka stock exchange (LuSE)website.

11 Responses to “THE STOCK MARKET IN ZAMBIA”

  1. Edson December 14, 2010 at 22:47 #

    Great Work Byrne! Selling the Ideas of Investment! How do you think the students, and youth in general can take advantage of the stock market to allow for progressive development of Zambia and Africa at large?

  2. economybuilding December 15, 2010 at 05:58 #

    Great question Edson. The greatest way to enable youths contribute to economic development while making their lives better is to enable them understand the benefits and possibilities of investing in the stock market.

    This can best be done by first encouraging the few ‘elite’ business and finance students/graduates conquer the ignorance by educating their peers on how to invest.

    Next, there has to be practice i.e actual buying and selling of shares by the youths. They have to be encouraged to feel free to walk into the premises of a stockbroker and ask for advice. I was pleased to receive a very friendly service at Intermarket a few weeks ago. If youths and students could understand that buying shares is as simple as buying a Television set, they may invest more and provide the much needed capital to firms while at the same time adding value to their lives.

    I must admit though that the first time a student or youth tries to invest tends to be frustrating. There are requirements such as passport size photos, proof of source of funds-usually a bank statement and reference letter(s). For a young person, producing these can lead to a high cost relative to the funds they want to invest. However once these are met, the process becomes similar to that of a baby learning to walk. Once they do, they can never fail to walk.

  3. benny January 5, 2011 at 23:30 #

    impressed with the work u guys are doing…i think this the way to go. Lets keep up with such good works and am cnfident with such briliant minds our future as a nation is bright.

  4. Sepo Chirwa The-ceo August 25, 2011 at 00:43 #

    I’ll say from common practice that I’ve been to stock brokers and all they talk about when it comes to investing is that it’s risky. As much as that is true, making it the principle topic of investing simply discourages the youth. The positive side of investing should what should be focused on.

    If you want my fellow youths to understand the stock market, you’ll have to go where they are rather than wait for them to come and understand…frankly, that won’t work. LuSE or any stakeholder should formulate an investing program that not only involves tentiary education investing but starts from as far back as primary school. Why do I say so? Because the best and wealthiest investor today, Warren Buffet, bought his first stocks at age 11….whats the harm teaching investment (on the stock market or otherwise) in primary school to a 12yr old?

    Frankly speaking, alot has to be done to help my friends. I’m speaking from experience and from deep down my heart because it hurts to see my friends get drunk on money that they can grow to help them tomorrow.

    I own some stocks currently with Celtel, Chilanga and AEL…I bought my first stocks in grade 10 and I regret starting late.

    Please listen to my cry and get in touch and I could be of help to my own cause.

    Thank you

    Chisepo Chirwa The CEO

    • frank nyasulu September 19, 2012 at 16:40 #

      Am encouraged, i want to get in touch with you chisepo chirwa please send me your email address.mine is nyasulu.frank@yahoo.com

  5. warren Mukelabai simangolwa February 13, 2012 at 23:16 #

    Although armed wit sufficient information, its not until now that i finally have decided to invest in stoke. how big should the initial investment be for a first timer, to be a good risk player

  6. mwale January 9, 2013 at 22:14 #

    I have an interest of investing in the stock market. I am currently unemployed and got a year to complete my university education, I would however like to invest in the Zambian stock market. Is being in employment a prerequisite to be able to buy shares or what is really needed for someone to be considered as financially stable?

    • Byrne March 30, 2013 at 21:45 #

      Hi Mwale, employment and finacial stability are not prerequisites to investing on the stock market.

      All you need to have is money from a legitimate source and you can become an investor.

      Due to the overwhelming response this post has generated, I would like to introduce a discussion forum for this and related topics. An invite will be coming to everyone in this thread.

  7. Byrne March 30, 2013 at 21:33 #

    Apologies for replying late Mukelabai. Do not let anyone (including investment brockers/advisors) despise the amount of investment you make. You can literally invest as little as you want or as much as you can.

    However, brockers will usually require you to have a minimum amount per order (investment). I personally started with ZMW 450 but I could have gone for a lower amount if I wanted.

  8. Chisepo Chirwa The CEO March 31, 2013 at 11:23 #

    Hello friends. I must start by saying that it has been such a long time since I came here. I started by reading the post I made a year and a half ago and it made me laugh. Anyway, to answer Mwale’s question, you don’t need to be in employment to be an investor on the stock exchange. Thanks

    • Mwila Katongo April 15, 2013 at 11:22 #

      I am really interested in investing on the stock exchange but i need to be educated a bit more. So where do i go and who do i talk to.

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