LUSAKA STOCK EXCHANGE

LUSAKA STOCK EXCHANGE

Lusaka stock exchange (LUSE) was opened on 21st February 1994 as a non-profit organization limited company




The stock exchange is a highly organized market shares and other securities are bought and sold

Functions of the stock exchange

  • Provide a market where stocks, shares can be sold or bought
  • Enable companies to raise their capital required by offering shares for sale to the public
  • Compensate members of the public defrauded by dealers
  • Provide rules that protect investors against fraudulent acts by some licensed members of the stock exchange
  • Enables the government to raise loan capital requirements to build schools, hospitals etc




  • Publish prices at which shares are traded at the stock exchange
  • Provide the exchange of second-hand securities
  • Give some indication to investors that a company quoted is reputable
  • Establishes prices for shares based on supply and demand
  • Prepare reports and data concerning all organizations on stock exchange and how they are trading

FUNCTIONS OF THE LUSAKA STOCK EXCHANGE

  • Provide a source of cheaper, long term capital for existing and new companies
  • Encourage investment and the growth in industries and commerce in Zambia
  • Provide an opportunities for the Zambian people to share in the success of private enterprises and the privatizes parastatal companies
  • Facilitate the privatization of the states owned companies
  • Promote private sectors initiative and create a free market system




  • Promote wealth creation though wide ownership of shares by Zambian citizen
  • Provide and efficient and orderly in shares and other marketable securities

HOW LUSE FACILITATE SECONDARY TRADING

  • By allowing the selling and buying of shares of profit
  • By allowing investors to buy shares when they are low and sell them when they are at a high price
  • By enabling people/companies to sell shares when the prices are high and buy the shares when they low
  • By permitting the buying in newly formed companies of shares at normal values and resale them when the price is high

LISTED COMPANIES ON LUSE




  • These are companies which are admitted to the financial list of LUSE controlled by the securities and the exchange commission (SEC) and LUSE Regulations
  • Whose shares are available to the general public through LUSE
  • Shares in these companies are freely transferable
  • Such companies must operate in transparent manner,
  • And shows good corporate governance
  • Must treat all shareholders equally

ADVANTAGES OF SHARE HOLDERS IN LISTED COMPANIES

  • Listing improves the liquidity of shares
  • Shareholders benefit from several tax exemptions i.e no capital gain tax
  • Companies income tax is reduced
  • There is no property transfers tax
  • Improve and enhance the image to the company
  • Many prayers of the Lusaka Stock Exchange

Dealers

  • Are the principles
  • Buy and sell shares and stocks on own behalf
  • Deals only with stock brokers with a view of making profit
  • May specialize in a certain type of shares or securities e.g. dealing in mining shares
  • Prepare documentation e.g. contract note when a deal to buy or sell share sis concluded.




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