It wasn’t very long ago that I saw it necessary to take a look at the easy access options for people who want to invest in shares and other investment products in Zimbabwe. Ctrade was first to the party and introduced convenience to small retail investors and large investors alike. The ZSE followed suit by launching ZSE Direct. There have been a few changes in both platforms since the last comparison and these changes need to be understood and compared. Ultimately what matters is what they mean for the investor.
First, let’s get the similarities between the two out of the way. The first that that will please those who read the previous article comparing the two is that you are now free to buy any number of shares that want. Previously you were restricted to buying in multiples of 100 units which made many great investments hard to reach for many people. Both ZSE Direct and Ctrade now offer the ability to buy any number of shares.
Last time around Ctrade was the clear winner being available via web, Android app, iOS app and USSD functionality. At the time ZSE direct was only available via the website. They have since introduced an Android which you can find out more about in the feature article on the ZSE Direct app. The development closes the gap but many will prefer the multiple access methods that Ctrade offers particularly Apple product users.
ZSE Direct offers access to the ZSE and all actively trading companies and counters available there. That includes the Old Mutual ZSE Top Ten ETF (ETF). Ctrade trailed for a little while but at the time of writing the ETF is now available on Ctrade as well. Ctrade adds to this by allowing access to Old Mutual Unit Trusts and The Financial Securities Exchange, an exchange that was designed for the listing of smaller companies. Currently, the exchange has only one company available, Old Mutual Zimbabwe Limited, the only publicly traded Old Mutual Shares available to Zimbabweans.
When it comes to the trading of securities you will start to see some major differences between the two platforms. There are a lot of differences to identify here so I will have to say a lot without going on forever. Firstly, when you buy shares, the settlement is 3 business days after the date of the transaction. The settlement date is the date when all affairs will be put in order including the name on the shares. ZSE Direct will take the full 3 additional business days to show the shares in your portfolio. With Ctrade settlement rules are the same but the shares are immediately credited to your portfolio. This means you can, for reasons best known to you, buy and sell shares on the same day. The same goes for proceeds of sales of shares. Ctrade makes shares available for purchases immediately, though you will have to wait the additional three days if you wish to withdraw the money. With ZSE Direct users will experience a 3-day wait to use the money internally (purchases) or externally (withdrawal) though they can pay an extra 2% to have the clearing of the money speeded up.
Another matter that would be very important to users are the fees involved. With Ctrade fees are charged as per the prescribed equities transaction fees. That amounts to 1.58% for buying and 2.92% for selling. ZSE Direct applies the same fees per transaction however there are few additional charges associated with using ZSE Direct. Firstly, with some deposit methods, you will pay ZWL$5 to deposit your money into your ZSE Direct trading account. Secondly, when order is matched, you are expected to pay an additional ZWL$45 as a matching fee. That is over and above the percentages mentioned earlier. If we then elect to have the availability of money expedited we would also pay the additional 2%. Over time, these fees add up to quite a decent amount depending on your activity levels.
Investors will also look at market data as being an important part of what an investment or trading platform should provide. Both platforms provide market data past and present. When it comes to current trading data you will find that data on Ctrade is delayed by around 15 minutes and as such you do not always have timely data. ZSE Direct offers the most up to date current data that is available though it may still be delayed by a few minutes. In terms of historical data, the two provide similarly detailed data. ZSE Direct has a simpler method of displaying data through the Counter Performance function which shows price and volume data in one view. Finally, Ctrade shows aggregated market depth data, data about the current demand (buy and sell offers) in the market, while ZSE Direct shows the top 10 for each category.
The registration processes between the two present the last difference we will look at. Ctrade has a one-stop-shop registration process which completes in around 4 business days. ZSE Direct has a slightly more complicated process that involves registering with a broker for a CSD account and this extends the process to around 8 business days.
Objectively speaking ZSE Direct’s penchant for additional fees such as charging you for receiving money and additional fees for a matched order make it hard to recommend to anyone. However their up to date data and how its displayed does make it essential to register for ZSE direct. C-Trade is still the better offer on the market. The verdict has not changed from last time, register for both, they are free. You will likely enjoy transacting with Ctrade more.