The history of the Zimbabwe Stock Exchange

WHEN it comes to stock markets, the New York Stock Exchange (NYSE) stands out as the most popular and developed exchange in the world. Piggy is also fascinated about how the market has evolved over the years. It is interesting to note that before there was a place called the stock market, buyers and sellers had to meet in the street. Sometime around 1790, they met every weekday under a buttonwood tree in New York. It just happened that the name of the street where all this took place was Wall Street. (The buttonwood tree was at 68 Wall Street)

Batanai matsika

News about trading activity spread quickly and a lot of people heard what was happening on Wall Street and wanted to be part of the action. On some days, as many as 100 shares of stock were exchanged. The Buttonwood Agreement, as it was called, was signed in 1792. This was the humble beginning of the New York Stock Exchange.

It was not long before brokers and merchants moved their offices to a Wall Street coffee shop. Eventually, they moved indoors permanently to the New York Stock Exchange Building on Wall Street. Even after over 200 years, the name Wall Street is a symbol for the US stock exchanges and the financial institutions that do business with them, no matter what their physical location. Wall Street is more of a convenient way of talking about anyone or anything connected to financial markets in the United States of America.

What of the ZSE?

Just like the New York Stock Exchange (NYSE), the Zimbabwe Stock Exchange (ZSE) also has a fascinating history that dates to 1896. It is worth noting that the first stock exchange in Zimbabwe opened shortly after the arrival of the Pioneer Column in Bulawayo in 1896. However, it only operated for about six years. Other stock exchanges were established in Gweru and Mutare.

The Mutare Exchange, also opened in 1896, thrived on the success of local mining, but with the realization that deposits in the area were not extensive, activity declined and it closed in 1924. After World War II, a new exchange was founded in Bulawayo by Alfred Mulock Bentley and dealing started in January 1946.

A second floor was opened in Salisbury (Harare) in December 1951 and trading between the two centres took place by telephone. Traders continued working by telephone until it was decided that legislation should be enacted to govern the rights and obligations of the members of the exchange and the general investing public.

The Rhodesia Stock Exchange Act reached the statute book in January 1974. The members of the exchange continued to trade as before and for legal reasons it became necessary to create a new exchange coincidental with the passing of the legislation.

The exchange dates from the passing of the act in 1974 and is operated and regulated in accordance with the act and its amendments, including 1996’s Zimbabwe Stock Exchange Act: Chapter 24:18. On achieving independence from Britain in 1980, the exchange changed its name from the Rhodesia to the Zimbabwe Stock Exchange (ZSE).

The ZSE has also been evolving and has moved from an open-outcry to an automated trading system (ATS). Another interesting development has been the introduction of Direct Market Access (DMA) for institutional investors. The DMA facility permits the trading members of ZSE to provide direct trading terminals to their DMA clients (institutional investors).

DMA is a mechanism whereby Fund Managers and Institutional investors can enter their orders directly into the Automated Trading System (ATS) through a Client Binding Terminal without manual intervention by the Broker.

This new development means a buyer can place their own orders to the buy and sell instantly, and “advertise” the quantity and price of a stock at which they are willing to trade. The major advantages of DMA are:

traders have more control and full transparency of their order book;

there is less potential for human error given that the orders to not go through brokers or market makers;

it offers more anonymity — often attractive to institutional traders who would prefer nobody to know what they are buying or selling;

lower overheads for Brokers since all they are doing is allowing clients to place trades through their computers,

information leakage is also minimised because the trading is done anonymously; and

lower transaction costs because only the technology is being paid for and not the usual order management and oversight responsibilities that come with an order passed to a Broker for execution.

Overall, DMA platforms can be integrated with sophisticated algorithmic trading strategies which can streamline the trading process for greater efficiency and cost savings.

Retail online share trading

One of the latest developments on Zimbabwe capital markets has been the introduction of C-Trade ( and ZSE Direct (

These platforms enable anyone from anywhere to buy and sell shares on the Zimbabwe Stock Exchange (ZSE) and Financial Securities Exchange (Finsec).

They also give Zimbabweans in the diaspora a chance to invest in shares with enhanced simplicity.  These platforms are in line with global trends given that it makes use of the internet and cell-phone technology, which in turn opens the markets to retail investors.

For a detailed account of the history of the ZSE, go through page 11 -23 of the Investment 101 handbook. Download a Copy of the Investor 101 Handbook on

Matsika is the head of research at Morgan & Co and founder of — / or mobile: +263 783 584 745.

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