Rights issue is an issue of new shares

based on a ratio of the number of new

shares to the number of shares held, and to

which existing shareholders have a right to

subscribe in priority at a fixed price.

n Security and Collateral Your shares can

be pledged as security for borrowing

money from financial institutions.

n Liquidity You can sell your shares

anytime to obtain cash.

n Diversifying your risk You have a wide

choice of companies to invest in. By

spreading your investment in a number of

companies, you significantly reduce the risk

exposure you would have, if you only

bought shares in one company.

Are there risks involved in investing on

the Stock Exchange?

Stock prices rise and fall. Companies may not

do as well as expected and their share prices

may fall. The stock market prices may go up

and down over extended periods and it may

sometimes be advisable to hold your

investment and simply wait for the share price

to recover.

Liquidity on the LUSE may be low. Therefore it

could take time to sell or buy shares.

Like other financial assets, there is always a risk

associated with investing in shares.

How to

Buy and Sell

SHARES on the

and the BENEFITS

LUSAKA STOCK

EXCHANGEMember of the Lusaka Stock Exchange

Regulated and licenced by the

Securities and Exchange Commission of Zambia

Stockbrokers Zambia Ltd

Second Floor, Exchange Building

Central Park, Corner Cairo / Church Road

P.O. Box 38956, Lusaka, Zambia

Tel: +260 21 1 232456 / 227303

Kitwe; Tel: +260 21 2 225984

Http//www.stockbrokerszambia.com.zm

ACT NOW!

CONTACT:

STOCKBROKERS ZAMBIA LTD!

Author: Charles Mate

Copyright: Stockbrokers Zambia Ltd

STOCKBROKERS ZAMBIA LIMITED

Promoting and creating an

investment culture in Zambia.

Make the decision to

become an investor!

Act Now!

RISK WARNING

Share prices rise and fall - seek professional advice before

investing.

DISCLAIMER

Stockbrokers Zambia Limited shall not be held liable for any

losses resulting from the information in this brochure. These notes

are for information purposes only.

Licensed Dealer Founder member of the LuSE

DP

images 0

96

6 1

60

60

2

THE LUSAKA STOCK EXCHANGE

The Stock Market in Zambia

You may be aware that the Lusaka Stock

Exchange (LuSE) began operations on 21

February, 1994. A stock exchange is simply a

market place for people to buy and or sell

shares in public companies.

For people that already own shares in a public

company, the LuSE provides a place where

they can let all potential buyers know about

the shares they have to sell. For people that

would like to buy shares, the LuSE provides a

place where they can let sellers know about

the shares that they want to buy. By bringing

together all of the sellers and the buyers of a

particular share, the LuSE ensures that both

sellers and buyers get the best possible price.

The LuSE is therefore an efficient, orderly and

transparent market for shares and other

securities.

Stock Brokers

Stock brokers are professionals. They are

trained to help you with the buying and selling

of shares. Stock brokers are licensed by the

Securities and Exchange Commission of

Zambia (SEC). A broker provides you with

investment advice, executes your trades on

the LuSE (arranging of buy and sell orders) and

takes care of all the details required to

complete your trade.

As an investor, you cannot deal directly with

the LuSE. You must use a licensed broker that

is a member of the LuSE.

Stockbrokers Zambia Limited is an

incorporated company. It is licenced by the

Securities and Exchange Commission as a

Dealer in securities in Zambia. It is a member

of the LuSE - and therefore a broker as well.

What to do if you want to buy or sell

shares

Open an account with a stockbroker!!

The first step is to contact Stockbrokers

Zambia Ltd (SBZ) and open a share account.

This is similar to opening a bank account. SBZ

will ask you to deposit any share certificates

that you currently own into the LuSE Central

Share Depository (CSD). This is similar to

depositing money with your bank.

Once your CSD account has been opened, you

may buy or sell shares through SBZ. You can

give instructions to your broker (by telephone,

email, facsimile or in person) and the broker

executes these as buy or sell orders on the

exchange.

The LuSE Central Share Depository

(CSD)

The LuSE is a modern Stock Exchange. It does

not use physical certificates but operates a

Central Share Depository (CSD). The CSD is

an electronic book entry record (i.e. a

database) of investors on the LuSE by name,

address and quantities of shares owned.

In short the CSD is like a bank of shares. It

enables transfer of shares electronically from

sellers to buyers without the need for physical

certificates. This allows trades on the LuSE to

be settled within three (3) days.

Saving on the Stock Exchange and

Accumulation

Make investing on the stock exchange a regular

habit by saving monthly to buy shares on the

LuSE. This is one way of saving and accumulating

wealth for your future or that of your children

and dependants.

Monitoring your Investment

Watch your investment grow and keep up to date

by reading the stock news in the newspapers,

contacting your brokers or the LuSE web site;

www.luse.co.zm or

the Stockbrokers Zambia website:

www.stockbrokerszambia.com.zm

SUMMARY

Benefits of investing on the Stock Exchange

How do you benefit from investing on the stock

exchange as compared to other choices of

investment? There are several benefits,

summarised below:

n Earn Dividends Dividends are a distribution

of part of the company's net profits to

shareholders.

n Realise Capital Gains This is the capital

appreciation or growth of your investment

over time. This is measured by the increase in

the share price.

n Get New Issues of Shares You can get the

benefit of Bonus Issues and Rights Issues.

A bonus issue is a free issue of shares to

existing shareholders based on a ratio of the

number of new shares to the number of

shares held.

STOCKBROKERS ZAMBIA LTD

HOW TO BUY AND SELL SHARES www.stockbrokerszambia.com.zm THE BENEFITS

RISK WARNING SHARE PRICES MAY RISE OR FALL CONSULT YOUR BROKER

Page 1Page 2