Harare - The dematerialisation penetration ratio (Demat ratio) is showing positive growth trends according to data shown by the Chengetedzai Depository Company (CDC) for the first half of the year (H1) upto June 30, 2018. Dematerialisation is the process of converting physical shares into electronic format. Zimbabwe adopted the virtual model in 2015 so as to speed up trades and allow for swift fand early  settlements. Presently holders of share certficates are not able to sell their shares before deematerialising them as has become the standard. In a trading update for the first half of the year, CDC chief executive Campbell Musiwa highligted that the number of virtual trades is growing.
"The dematerialisation statistics for the mostly traded counters continue to improve steadily.
  "However, there remains a need to encourage investors in less liquid counters to also dematerialise their securities," he said. The number of trades through the electronic platform show a positive growth trend as from 2014 to date with the largest number of trades recorded in 2017 at 18,157 accounting for a market value of $1,395,79 million. In 2014, 688 trades where processed, 7,278 for 2015 and 9,192 trades processed in 2016. "The average dematerialisation pernetration ratio across all counters increased marginally from 39 percent as at May 31, 2018 to 40 percent as at June 30, 2018." The total number of trades in 2018 now stands at 9,665 for the period upto June 30 with a market value of $678,92 million realised, a figure which could well surpass the 2017 records come full year. "Dematerialised securities accounted for 49 percent of the ZSE equities market capitalisation as at June 30, 2018," said Musiwa. According to CDC report, the cumulative number of securities deposits processed since going live is now 64,285 after CDC processed 2,500 securities deposits in June 2018. "Monthly turnover increased for the fourth consecutive month despite the market trading in negative territory in June 2018. "The ZSE Equities market recorded a turnover figure of $72.988 million. This is the highest figure that has been recorded in 2018. "There was a 21 percent increase in turnover compared to the May 2018 figure of $60,284 million. "The CSD received and processed 2,346 ZSE trades in the month of June 2018," said Musiwa. Dealing in demat form is beneficial for investors, brokers and companies alike in a number of ways. It reduces the risk of holding shares in physical format from investor’s perspective and it also reduces the risk of delayed settlement and enhances profit because of increased participation. From share issuing company’s perspective, issuance in demat format reduces the cost of new issue as papers are not involved. Efficiency and timeliness of the issue is also maintained while companies deal in demat format. Equally important, demat gives opportunity to the ordinary man who in the past stayed away from trading markets because of the sheer paperwork which was involved Depository is the body which is responsible for storing and maintaining investor's securities in demat or electronic format. In Zimbawe we have the Chengetedzai Depository company from whom this report has been contructed.