Mutual funds. Fixed deposits, Public Provident Fund (PPF) and small savings accounts. Real estate. Stock market. Commodities.
Learning how to invest is an important skill, therefore developing a base of knowledge that will help you understand how to invest and determine what might be a suitable investment for you is crucial to every investor.
The process of Investing in Zimbabwe can be condensed into four major steps. The process is even shorter for existing domestic companies that may not require work permits.
Investing in the ZSE through a stockbroker
To start investing in the ZSE through a stockbroker, follow the below steps;
1. Open a Trading account
Practically more than one account is required for an investor to invest in the stock market. Bundled under the term “trading account” comprises the following:
A stockbroking trading account (with any of the current 20 stockbroking firms https://www.zse.co.zw/stock-brokers/ )
A Central Securities Depository (CSD) account
A custodial account (which can be provided by your stockbroker if they offer Broker controlled accounts or by one of the independent custody companies)
2. Submit Know Your Client (KYC) Documents
A trading account is opened by completing and signing account opening forms at your preferred stockbroking firm and submitting the following KYC documents;
2. a) For individuals
Copy of ID (passport for foreign investors)
Proof of residence (utility bill within three months from date of processing in name of the account holder or accompanied by an affidavit from the lessor, if renting); and 2 passport-size photos.
2. b) For companies/trusts/estates/NGOs
Registration certificate;
List of directors/trustees (CR14 etc.)
Registered office details (CR6)
Directors/trustees’ KYC (same as in Individuals)
3. Deposit investment funds with your custodian or stockbroker*
If your stockbroker acts as your custodian (broker-controlled account) you deposit funds into your stockbroker trust account and if you have an independent custodian from your stockbroker you deposit the funds into the custodian account.
NB* – funds need to be deposited only when you intend to buy from the stock market.
4. Place orders with your stockbroker
Once you have made a decision to buy or sell securities in the stock market, you need to contact your stockbroker and convey your desire emphasizing the type, quantity and limit price (if any) of the securities to be transacted.
Other information like the time period the order will be valid is also required.
Your stockbroker then sends your request to the ZSE Automated Trading System (ATS), where it is entered into a central order book with all the other requests to buy or sell shares.
If the price you want to pay is matched with a seller at the same price, the transaction takes place and you will become the owner of the shares you decided to buy.
Information provided in this article is for educational purposes and does not constitute financial advice. You should obtain independent advice from a Registered Stockbroker or Financial Advisor before making any financial decisions.
For more information about how to invest in the ZSE, visit the ZSE training portal www.zsetraining.co.zw, email info@zse.co.zw or interact with us on our social media platforms @Zimbabwe Stock Exchange on Twitter, Facebook, Linkedin and Instagram.
What is the best investment in Zimbabwe?
The mining sector is a major contributor to the country’s economy, with significant opportunities for investment in gold, platinum, and diamond mining. Agriculture is also a key sector in Zimbabwe, with opportunities for investment in crop production, livestock farming, and agro-processing.
How do I start investing in Zimbabwe?
4 – Step Investment Process
- Step 1 – Company Registration. Company name search and registration.
- Step 2 – Investment License. Register as an investor and start operating your business.
- Step 3 – Secondary licenses. Apply for industry or sector specific licenses.
- Step 4 – Work Permits.
Can a foreigner invest in Zimbabwe?
The country has three main avenues for fostering foreign investment into Zimbabwe. These include the Zimbabwe Investment Authority (ZIA), Zimbabwe Stock Exchange (ZSE) and the Reserve Bank of Zimbabwe (Exchange Control).