By Brian Tembo

Marketing and PR Officer

YOU TOO CAN INVEST IN ZAMBIA VIA THE LUSAKA STOCK EXCHANGE LTD

EASY STEPS FOR ZAMBIANS ABROAD AND FOREIGN INVESTORS TO INVEST ON THE LuSE

The Lusaka Stock Exchange (LuSE) has received numerous queries from investors abroad on the

operation of its stock market. In response, the LuSE has now made arrangements for Zambians abroad

and foreign investors to easily buy and sell shares on its market. Please follow the notes and

guidelines below.

Select a broker of your choice from the list at the back and fill in an e-mail application form to open

your share account. Upon receipt of your e-mail application form, the LuSE Broker should send you a

note to confirm that your share account has been opened at the Central Share Depository [CSD] of the

LuSE.

The Broker should also advise you of your share account number.

A copy of your application form will be sent to the LuSE by your broker for verification and recording.

Step 2: SEND MONEY FROM YOUR BANK TO YOUR BROKER IN ZAMBIA TO BUY SHARES ON THE LuSE

Zambians abroad and foreign investors can easily send money to their appointed broker with

instructions to purchase shares on the LuSE. Call your broker for their bank account details.

The LuSE has two custodian banks, namely Barclays Bank Zambia Ltd and Stanbic Zambia Ltd.

Custodian banks provide safe custody of funds and securities in Zambia for both domestic and

investors abroad.

The custodian bank receives instructions from the client [investor abroad] and executes these in the

domestic market. For a buying transaction, the custodian bank will receive the funds from the investor

abroad.

The custodian will then monitor the entire transaction, and release funds when the buy order has

successfully been traded, cleared and settled on the LuSE. After settlement, the custodian may [if the

client requests] proceed to hold the shares in a custodian sub-account in the CSD of the LuSE, on

behalf of the investor abroad. The contact details for the LuSE custodians are shown at the back.

Once your order to buy or sell has been traded (matched) at the stock exchange, the LuSE produces a

trade confirmation report to your broker. Your broker is then required, under the Securities Act, to

issue you a Contract Note within 24 hours. The contract note is the legal confirmation of the

transaction. You should therefore receive an e-mail contract note from your broker to confirm that

your buy or sell order has been matched on the LuSE and that the transaction will be irrevocably

settled with finality 3 days after the trade (T+3].

Contract notes should be filed and kept under the safe custody, as they are legal proof of the

transaction.

3 days after the trade, termed T+3, [excluding weekends and holidays], the matched trades are settled

by the LuSE Central Share Depository. This settlement involves two simultaneous steps – the

movement of money [payment] from the buyer to the seller and the movement of shares [delivery]

from the seller to the buyer. This is termed Delivery versus Payment.

Settlement is run everyday on the LuSE at 0900 hours and completed by 1100 hours, the brokers

[seller’s side] receive money for all shares sold whilst the buyers receive the shares purchased as book

entry credits to their share accounts in the CSD. Brokers are therefore in a position to pass on the

money from the sale proceeds, to their clients the same day on T+3 when settlement is run.

The procedure for selling shares is similar to that for buying shares as described above.

To sell shares you should send an instruction to your broker or custodian bank preferably by fax or by

e-mail.

The LuSE website gives indicative share prices in Kwacha, US Dollars [or cents] British pounds [or

pence] and South African rands [or cents] to assist investors abroad in their investment decisions.

Latest share prices can be obtained by contacting your broker or the LuSE by phone or e-mail.

Quarterly and final dividends, when declared, will be mailed to the address declared by the investor on

the client account form.

It is important therefore that the address declared to the LuSE on the share account application form is

the same as the address for receipt of dividend payments. All other correspondence [annual reports,

AGM notices, EGMs, etc] will be sent to this address.

Investors abroad can subscribe to the LuSE Daily Stock News, Weekly Stock News or the Monthly

Newsletter. Details on subscription are available from luse@zamnet.zm

The LuSE market is designed to operate to current best international standards.

The LuSE Listing Rules have been harmonised with those of the Johannesburg Stock Exchange [JSE].

The Zambian securities market is regulated by the Securities & Exchange Commission [SEC Zambia]

under the Securities Act, Chapter 354 of the Laws of Zambia.

The Securities Act is modelled on modern securities legislation as found in the developed economies,

and seeks to provide adequate investor protection and the maintenance of a market that is fair, orderly,

efficient and transparent.

All players in the Zambian securities market [brokers, broking firms, and even the LuSE] are licensed

by the SEC Zambia.

If investors have any complaint or concern, they should contact the Direct or of Licensing at the SEC

Zambia on e-mail: sec@zamnet.zm or telephone number 260 1 227012/226911 or fax number 260 1

225443. The SEC Zambia will investigate the matter to give appropriate redress and remedial action.

First issued on 18 July 2000

For further details, contact the LuSE CSD Manager on e-mail: luse@zamnet.zm or telephone number

260 1 228594/228391 or fax number 260 1 225969

The Lusaka Stock Exchange – Promoting Investment and Growth in Zambia

? No foreign exchange controls

? No capital gains tax

? No limits on foreign ownership

? Nil Property transfer tax on local shares

? Listed companies taxed at 30%

? T+3 Settlement

? Immobilisation of Scrip-no physical certificates

Issued February 2003

By Brian Tembo

Marketing and PR Officer