The Lusaka Securities Exchange (LuSE) provides two main boards for trading equities: the Equity Board (also called the Normal Board) and the Odd Lot Board. Chuuma, as a digital stockbrokerage, facilitates trading on both of these boards. Here’s an overview of each board, with examples of how they might operate in the context of Chuuma:

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Equity Board (Normal Board)

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Purpose

The Equity Board is the primary board for trading listed and quoted ordinary and preference shares.

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Trading Unit

The minimum trading quantity on the Equity Board is 100 securities, and orders must be in multiples of 100.

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Trading Sessions

The Equity Board operates with two main trading sessions:

  • Pre-opening Session: From 10:00 to 11:00 hrs, orders can be entered, amended, or deleted, but no trades occur. This allows the market to prepare for the day’s trading.

  • Continuous Trading Session: From 11:00 to 14:00 hrs, orders are matched and trades are executed.

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Matching of Orders

Orders on the Equity Board are matched based on price and time priority. This means that orders with the best price (highest bid or lowest ask) are prioritized, and if multiple orders have the same price, the earliest order is executed first.

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Order Types

Chuuma supports different order types, including market orders and limit orders. Market orders are executed at the best available price, while limit orders are executed at a specified price or better.

  • Market Orders cannot be amended and do not participate in the pre-opening session.

  • Limit Orders can have qualifiers such as “Fill or Kill” (FOK) or “Fill and Kill” (FAK). FOK orders require immediate execution of the entire order or it is cancelled, while FAK orders allow for partial execution with the remainder being cancelled. These orders are not allowed in the pre-opening session.

  • Time in Force: Limit orders can also have a time-in-force attribute such as “Good Till Day” (GTD) that is valid for a set number of days.

    • Example: A Chuuma client wants to buy 500 shares of ZCCM at a price of 15 ZMW or better. This order would be placed on the Equity Board because it’s a multiple of 100. If the client sets a Good-Till-Day (GTD) order for 3 days then this limit order will remain on the order book for 3 days until executed or cancelled.

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Odd Lot Board

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Purpose

The Odd Lot Board is designed for trading listed and quoted ordinary and preference shares in quantities less than 100 securities.

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Trading Unit

The minimum trading quantity is one security, and orders are accepted in multiples of one, up to a maximum of 99 securities.

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Trading Session

The Odd Lot Board operates with a continuous trading session from 11:00 hrs to 14:00 hrs.

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Matching of Orders

Orders on the Odd Lot Board are matched based on price and time priority.

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Market Impact

Trades executed on the Odd Lot Board do not update market indices or the last execution price. However, the market volume and value of trades are still updated.

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Visibility

The Odd Lot Board is visible to the market.

  • Example: A Chuuma user wants to buy 50 shares of Shoprite. Since this is less than 100, this order would be placed on the Odd Lot Board.

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Order Processing

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Order Routing

LuSE’s Automated Trading System (ATS) automatically routes client orders to the appropriate board based on the quantity specified.

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Mixed Lots

If a client submits an order with a quantity that includes both full lots (multiples of 100) and an odd lot (less than 100), the full lot portion is placed on the Equity Board, and the odd lot portion is placed on the Odd Lot Board.

  • Example: A Chuuma client submits a sell order of 1456 shares of a particular security. 1400 of the shares would be placed on the Equity Board, and 56 would be placed on the Odd Lot Board.

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Accessibility

Chuuma’s mobile app and USSD platform allow users to easily access and trade on both boards.

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Notifications

Clients receive timely notifications regarding the status of their orders and executions.

By providing access to both the Equity and Odd Lot Boards, LuSE enables a wider range of investors to participate in the Zambian stock market. The Equity Board facilitates trading of larger quantities, while the Odd Lot Board allows investors to trade smaller quantities, providing more flexibility for all types of investors.