Investors may participate in the capital market by buying or selling securities listed on the Mozambique Stock Exchange (shares, paper and commercial paper).
See below some short answers and explanations about stock market investment. For more details see our Financial Literacy Supplement.
Porque investir na Bolsa de Valores
Agostinho Vuma - CTA Chairman
Ary Aisen - IMF Representative in Mozambique
João das Neves - Zero Investimentos S.A. CEO
Mario Vicente Sitoe - OCAM President
Salim Valá - BVM Chairman
Salimo Abdula - Intelec Holdings Chairman
How to invest in the Stock Exchange
How to buy Securities on the Stock Exchange?
Purchase or sale orders of securities from the Stock Exchange may be given to the financial institutions existing in Mozambique (or directly to the StockBrokers), by completing a form called stock exchange order.
What is in a Stock Order?
In addition to the identification of the investor, a Stock Exchange Order also contains the following information:
- Date of order;
- Securities intended in the stock exchange
- Order expiration date.
At which price is the stock order given?
As for the price, investors have two modalities:
- With limit - when a maximum price that one is willing to pay for or a minimum price that one is willing to sell is stipulated.
- The best - when no maximum purchase price limit or minimum selling price is indicated.
Best-priced stock orders are stock orders that give priority to distributing business, but may run the risk of paying a higher price on the purchase or receiving a lower price on the sale.
However, prices have a maximum and a minimum limit, above or below which, stock exchange orders are not accepted. The maximum allowable securities price variation is 25% in the case of shares and for other securities representing share capital, and 20% in the case of any securities representing debt.
What is the expiry date of a Stock Exchange Order?
As for the expiry date of a stock exchange order, there are basically two modalities: they can be given for a single stock exchange session; they may be given for stock exchange sessions that take place until a certain date, which may not exceed thirty (30) days.
What is the cost of a Stock Exchange Order?
Under the stock exchange order, the investor pays the Stock Exchange, the Central Securities Depository and StockBrokers fees, plus commissions from the financial institution. These costs are among the lowest of the African stock exchanges. If it is a purchase order, the value of the securities purchased will also be paid.
Who are the StockBrokers?
Financial institutions transmit stock orders to the operators, who are the only entities authorised to trade directly with BVM:
- ABC - African Banking Corporation;
- Banco Único;
- Barclays Bank Mozambique;
- BCI - Banco Comercial e de Investimento;
- BNI - Banco Nacional de Investimento;
- CPC - Cooperativa de Poupança e Crédito;
- Millennium BIM;
- Standard Bank from Mozambique;
- BiG - Banco de Investimento Global.
Where are the Stock Orders traded?
Stockbrokers trade the stock exchange orders in the Trading System (also referred to as Trading) of the Stock Exchange, according to the instructions given by the Investors (purchase or sale, quality, price).
On which days are stock exchange orders traded?
BVM (Mozambique Stock Exchange) holds Stock Exchange Sessions every business day, between 08:00 and 12:00 o`clock, where the listed securities are traded on the Stock Exchange.
How can the results of the Stock Exchange Session be known?
Disclosure of information on the stock exchange sessions, trades undertaken, trades events, statistical data is done through the BVM website (www.bolsadevalores.co.mz) and the Official Publication of the Listing Bulletin is done on the Events Calendar.
What are the Benefits of Investing in a Stock Exchange?
The benefits of investing in listed securities on the Stock Exchange are as follows:
- Diversification of savings application;
- Higher return on investment;
- Greater security of operations;
- Greater transparency in transactions;
- Greater ease in purchase and sale;
- Larger client base;
- Trading on a regulated market;
- Tax benefit for shares;
- Stamp duty exemption;
- Use of securities as collateral in commercial banks.
Why invest in shares?
- The investor becomes a shareholder of a trades, which means being part of the shareholder structure of a trades in the proportionality of the shares held;
- The value of the investment in shares only returns to the investor when the investor sells the respective shares;
- The yield of shares depends on the financial performance of a company;
- The yield of shares derives from the distribution of dividends and the valuation of shares on the stock market;
- The yield of shares is taxed at a rate of 10% on IRPS / IRPC.
Why invest in bonds?
- The investor becomes a bondholder of a company, which means being a creditor of a company by the value of the bonds held;
- The value of the investment in bonds returns to the investor by the end of the bond loan period;
- The bond yield depends on the conditions established by a company for bond loan (loan amount, duration, interest rate, repayments, frequency payment), not on a company's financial performance.
- The bond yield derives from the interest rate established, as well as the valuation of bonds on the stock market;
- The bond yield is taxed at a rate of 20% on IRP / IRPC.
Why in Commercial Paper?
- The investor becomes the creditor of a company by the value of the Commercial Paper held;
- The value of the investment in Commercial Paper returns to the investor by the end of the loan period;
- The yield of Commercial Paper depends on the conditions established by a company for the loan (loan amount, duration, interest rate, repayment period), and not on its financial performance.
- The yield of Commercial Paper derives from the interest rate established, as well as from the valuation of the Commercial Paper on the stock market;
- The yield of Commercial Paper is taxed at a rate of 20% on IRP / IRPC.