Lusaka Securities Exchange

History

The Lusaka Securities Exchange (LuSE) was established with preparatory technical assistance from the International Finance Corporation (IFC) and the World Bank in 1993. The Exchange opened on 21 February 1994. In its first two years of operations, the LuSE and Securities and Exchange Commission (SEC) were funded by the UNDP and Government of Zambia as a project for financial and capital market development in Zambia, under the multi-component private sector development program. The formation of LuSE was part of the government's economic reform program aimed at developing the financial and capital market in order to support and enhance private sector initiative. It was also expected to attract foreign portfolio investment through recognition of Zambia and the region as an emerging capital market with potentially high investment returns.

Another important role of LuSE was to facilitate the divestiture of Government ownership in parastatals and realization of the objectives of creating a broad and wide shareholding ownership by the citizenry via a fair and transparent process.

The 1972 Securities Act revised to facilitate the establishment of the Securities Exchange. It was structured around models of a modern Stock Exchange with automated clearing and settlement facilities through a Central Securities Depository (CSD). The Government of the Republic of Zambia (GRZ) provided grant financing to LuSE from 1993 till 2009. Subsequently, GRZ stopped providing support and LuSE became totally dependent on its listed companies to generate operational revenues. The sustainability of LuSE became dependent on increasing the number and size of companies that listed on the Exchange. In 2005, the company introduced its own governance code for listed companies. All Africa later called the code "a landmark achievement in the development of corporate governance in Zambia."

The LuSE, since inception, has expanded beyond being a platform for trading shares and bonds, as demonstrated by some companies from across the spectrum of industry that have used it to raise the public capital for expansion. Among its largest companies in 2024, were Copperbelt Energy Corporation, ZCCM IH, Zambia Sugar, ZANACO, Standard Chartered Bank Zambia, Airtel Zambia, Lafarge and Zambrew, PUMA, Real Estate Investment Zambia (REIZ),.

In January 2022, it was reported that the LuSE topped the list of the Best performing exchanges in Africa with a 93.2 percent gain. In March 2022, the LuSE launched the online GEM Portal, an initiative approved by the Securities and Exchange Commission of Zambia to provide start-ups, small and medium businesses with access to funding to assist the growth of new business ventures and rebuild businesses impacted by the COVID-19 pandemic. In September 2022, the government of Zambia announced a zero withholding tax on interest from investment in green bonds on the local bourse to stimulate green investments. At the end of that month, the Lusaka Securities Exchange All Share Index had strengthened 28 percent YTD in dollar terms of which 17 percent is attributed to third quarter in comparison to the S&P500 which had slid 25 percent amidst a global environment characterized by excessive inflation, soft commodity price dislocations and monetary policy tightening.

Mission statement and mandate

To provide investors, businesses and other issuers with an efficient, reliable, orderly, transparent and cost effective platform for the raising of capital and trading of securities.

The LuSE's core mandate is to provide a fair and efficient platform through transparent and equitable trading of the listed securities. LuSE contributes to wealth development, financial services and a platform for investment for foreign and local investors. It provides a platform where companies can raise long term capital and secondary trading of shares. LuSE also provides facilities for the listing of securities and provides users with an orderly, transparent and regulated platform to trade.

Market listings

As of November 2024 there were 20 Listings on the LuSE And a total of 15 companies were showing on the quoted tier. During the year 2024, two entities delisted from the Exchange namely Taj Pamodzi Hotel and Investrust Bank Zambia Limited.

During 2024 fiscal year the LuSE listed its first Real Estate Investment Trust (REIT) which was listed in USD. As things stand as of November 2024. The LuSE operates a multi-currency listings of both USD and Zambian Kwacha.

The LuSE operates an Alternative Market (Alt-M) meant for high quality and growth MSMEs.

Delistings

In 2024 the LuSE recorded two delistings namely Taj Pamodzi Hotel and Investrust Bank Zambia Limited.

Trading times

Trading takes place from Monday to Friday from 10:00 GMT+2 to 14:00 GMT+2. These times exclude public holidays.

Alternative Market

In May 2016, the Lusaka Securities Exchange announced the introduction of the LuSE Alt-M, an alternative market for small and medium-sized enterprise to participate in.

Green Bonds - Supporting Sustainability Agenda

The LuSE has over the period increased its focus on contributing to the agenda of sustainability. This can be seen from the Green Bonds Guidelines that have been issued focussed on addressing climate change and other environmental challenges. These guidelines provide for the issuance of fixed-income securities by companies that seek to raise funds for projects with a positive environmental impact.

As of 2024, the LuSE had one listed Green Bond of over $150m on Copperbelt Energy Corporation (CEC) Zambia, which raised funds for its Itimpi Solar Power Station project. Which was issued in tranches of $50m in 2023 and $100m in 2024.

Raising Debt on the LuSE

The LuSE listing requirements allow for the issuance of Bonds by corporate companies for purposes relating to a company’s strategic objective. The bonds provide capital in exchange for a series of interest payments to the bondholder.

As at November 2024, the following were the running Corporate Bonds on the LuSE.

Approved Brokers on LuSE

The Exchange has two categories of brokers namely the trading brokers and sponsoring brokers.

References

References

1. "Listed Companies - Lusaka Securities Exchange (LuSE)".
2. Lusaka Securities Exchange. (17 April 2022). "Lusaka Securities Exchange Listed Companies".
3. African 'XChanges. (14 April 2022). "Lusaka Securities Exchange (LuSE) Live".
4. "Introduction to the Lusaka Stock Exchange".
5. "LuSE".
6. (2005-08-16). "Zambia: LuSE Introduces Own Governance Code for Listed Companies".
7. "LuSE".
8. (25 April 2022). "South Africa still dominates Africa's Top 250 Companies table".
9. Lusaka Times. (10 January 2022). "LuSE tops list of best performing African Stock Markets".
10. Times of Zambia. (24 March 2022). "LuSE Launches Online GEM Portal".
11. (3 October 2022). "Zambia seeks to deepen capital markets with green bonds 2023 fiscal plan incentivizes issuances on local bourse".
12. (6 October 2022). "Rosy but thorny amidst global chaos Zambia still Africa's sole investment asset hotspot".
13. African Markets. (17 April 2022). "LuSE Listed Companies".
14. PWC. (30 September 2021). "Listed companies analysis report 2020".
15. African-Markets. (May 2016). "LuSE Alternative Markets".