HOW Investment Clubs In Zambia Can INVEST IN SECURITIES

 

15. In order to invest in securities that are listed or quoted on the stock exchange, what is the first step an investor must take?

Having decided to invest in securities that are listed or quoted on the stock exchange, investors must choose a stockbroker.

16. What is a stockbroker?

A stockbroker is a firm that is licensed by the SEC Zambia to buy and sell securities on the stock exchange on behalf of investors. To start the process of investing, the stockbroker will usually request the investor to open an account with them.

17. What are the requirements for opening an account with a stockbroker?

In order to open an account with a stockbroker you will be required to produce the following:

 A National Registration Card/Passport

 A document showing proof of physical address, e.g. a lease agreement with your landlord

 Agreement with a landlord, title deeds to a property

 Two passport size photos

18. Is a stockbroker a bank?

No! Any monies collected from investors are held separately from the stockbroker’s own funds.

19. What are the broker charges for transacting on the stock exchange?

The stock exchange has a guide commission charge of 1.375% of the value of the transaction. For big transactions, the amount can be negotiated. When investing a small amount, you must weigh up carefully if the amount you invest can absorb the commission. For instance, if you want to invest K20 and the minimum brokerage commission is K10, then what you will end up investing is actually K10because the stockbroker will automatically deduct their commission. This will thus effectively reduce the amount you invest by half. If you invest K100 the commission will be K1.38 and if the minimum commission is K10 you will pay K10.

20. After opening an account with a stockbroker for the first time, what happens next?

The stockbroker will advise you on which shares are doing well. You can also choose what you want to invest in. You will fill out a “Buy Order”. By filling out the Buy Order Form you are authorizing the broker to look for securities you wish to purchase on the stock exchange on your behalf.

21. What happens if the broker is successful in finding me the securities I want?

Once this happens, the transaction shows as a trade on the stock exchange. However, if you are buying shares you only acquire formal ownership after three days because the transaction must first be cleared through the exchange systems. If you are buying debt securities, the transaction can clear on the same day.

22. What is the “T +3” trading system?

The “T+3”trading system is the three day process required for a transaction involving shares to settle on the stock exchange. Literally translated, it stands for “Transaction + 3 business days”.

In the case of debts securities, “T+0”is the trading system. In other words, the transaction settles on the same day as it takes place.

When is the stock exchangeOpen for Business?

Trading occurs on business days Monday to Friday excluding public holidays for 2hours continuously from 11:00 to 13:00 hours.

 

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ZANAICA is promoted and hosted by Twende, Twende, an on-demand platform and Zambia’s first superapp, that also offers motorcycles (bodabodas) and tricycles (tuktuks), on lease to own, hire purchase model. Twende promotes investment clubs as an initiative to promote savings and investment culture in Zambia. To get free investment club training, do not hesitate to contact us on facebook at https://wa.me/+254103242604, or https://chat.whatsapp.com/HNosGG0OmdWHvXnFHVSLoh or email us at zanaica@twende.store or visit Twende offices at Manda Hill, Plot 271/C.