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 16.5 million. 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. On top of this, Companies listed on the Lusaka Stock Exchange get a 2% discount on tax in first year of listing on LuSE and a further 5% if one – third of shares are owned by indigenous Zambians.
Stock markets are important because they help companies raise capital while helping individuals have investment options. Stock markets for smaller companies such as the Lusaka Stock Exchange Alternative Investment Market (LuSE – Alt) are becoming increasingly significant in helping smaller companies raise capital. Stock markets also empower people economically as individuals have a chance to take part in the economy as owners in companies. Owning shares is owning a part of a company.
SOME LISTED STOCK ON LuSE
The Lusaka Stock exchange was formed in 1993 and became operational in 1994. The main stock listed on LuSE by november 2018 include:
- African Explosives Zambia
- Airtel Networks Zambia
- British American Tobacco Zambia
- Cavmont Capital Holdings
- CEC Africa Investment
- Copperbelt Energy Corporation
- First Quantum Minerals
- Investrust Bank
- Lafarge Cement Zambia
- Madison Financial Services
- Metal Fabricators Of Zambia
- National Breweries
- Pamodzi Hotels
- Prima Reinsurance
- Puma Energy Zambia
- Real Estate Investments Zambia
- Shoprite Holdings
- Standard Chartered Bank Zambia
- Zambeef Products
- Zambia Bata Shoe Company
- Zambia National Commercial Bank
- Zambia Sugar
- Zambian Breweries
- ZCCM Investment Holdings
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. The following are the main stock brokers
- Madison Assets Management Company Limited
- Pangaea Securities Ltd
- Equity Capital Resources
- Stockbrokers Zambia Limited
- Autus Securities Ltd
- Finance Securities Zambia
More details about stock brokers can be found by clicking here
So are you ready to invest in Zambia, Visit the Lusaka Stock Exchange (LuSE) website and then a stock broker.
FURTHER INFORMATION
If you need to read more about the stock market in Zambia, follow the links below
https://www.african-markets.com/en/stock-markets/luse/listed-companies
economy building 
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?
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.
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.
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
Am encouraged, i want to get in touch with you chisepo chirwa please send me your email address.mine is nyasulu.frank@yahoo.com
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
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?
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.
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.
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
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.
Hai well i just read your comment and i also want to invest but am clueless on the whole thing, your help will be appreciated
am interested in investing but am clueless on the whole thing, your help will be appreciated
How often do people get in touch on this site? I want in too. I watch a lot of Wall Street related documentaries, series, movies etc and I just love how financial literacy brings out the best in people. However, watching that stuff doesn’t necessarily mean I can do it but it just gives me a picture of how things actually occur. I am a 4th year Bachelor of Science in Economics and I seriously would like to get involved in stock markets.. I love it theoretically and I want to find out if the feeling is mutual if I put it into practice. I am willing to invest in a share with the little I can put in cause I am only an Intern. So all I am saying is.. teach me how to be a stockbroker and let’s make some money.
explain the benefit of buying stocks and the advantages and disadvantages of investing on the stock exchange.
i want to invest on the stock exchange what is the first step that i need to take?where do i go?
Cool information very usful. Can I get updates on Shares avilable?
I have really been encouraged to invest in the stock market. I am a student at copperbelt university doing Bachelors degree in Business Administration and the topic of Investment really fascinates me. As a student in Business Administration, I have learnt various aspects about investment and now I wish to put this into practice. Participating in the stock market is one of the ways of getting started.
Really I have been wondering if youths invest in stock but its encouraging to learn that actually they do. Nice information