Archive | November, 2010

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.

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