ZSE registers worst performance in years
ZIMBABWE Stock Exchange (ZSE) market turnover for 2023, currently stands at US$173 million, the third lowest since 2009, despite the market registering an increase in security dealers and financial advisors during the period, according to regulator, Securities and Exchange Commission of Zimbabwe (SECZ) Chief Executive Officer, Anymore Taruvinga.
He said despite the signs of a market that is struggling, where market capitalisation currently stands at around US$2,79 billion from a peak of more than US$6 billion, the stock market however, has great potential.
Taruvinga said this last Friday during a panel discussion at the 2023 Capital Markets Awards organised by Business Weekly in partnership with Financial Markets Indaba that was held in Harare.
This year’s edition of the Capital Markets Awards was sponsored by Chengetedzai Depository Company Limited (Gold Sponsor). Other sponsors are UNICAF, Bard Santner Markets Inc, Trigrams Country Properties, AdScryns, Private Deal Network and Anotida Capital.
These statistics come as the ZSE gave listed entities the option to report their financial statements in United States Dollars earlier this year, in bid to deepen the equities market.
“Looking at the figures, going back from when we dollarised in 2009, turnover for this year 2023 in US dollar terms is about US$173 million and that is the third lowest since 2009. In terms of market capitalisation as of today we are sitting at around US$2,79 billion and we have had a peak market capitalisation of more than US$6 billion.
“Moving on to foreign participation, at peak we were at about 56 percent but this year we are down to 9 percent,” said Taruvinga.
“It has been a challenging environment but the market has remained resilient even if you look at the number of licensees. Last year we had 214 players and there has been an increase this year that has come through from licensing of new collective investment schemes and we have also seen an increase in the number of securities dealers and financial advisors,” he said.
He said these indicators speak of a market that has great potential in terms of growth.
“I think we have had some green shoots in the form of Victoria Falls Stock Exchange, which is a fairly new exchange, just established over three years ago where we saw the market capitalisation more than doubling and turnover increasing by 81 percent this year. We have also seen growth in terms of new products,” he said.
Investment Professionals Association of Zimbabwe (IPAZ) representative, Simbiso Musa, said efforts to limit speculative behaviour by the market regulators through pronouncements of capital gains and vesting periods, was also one of the key factors that affected market performance given that foreign inflows and the turnaround time for investors to get in and out of the market were disrupted.
“If we are to project the performance of the All Share Index from 2021, we see that in 2021 there was a large gap after pronouncements of capital gains and vesting periods and with this, to a certain extent regulation market affected performance. This was done in efforts to curb speculative behaviour but it has affected even foreign inflows and the turnaround time for investors to get in and get out of the market hence it then affects liquidity and inturn affect performance of the market. So we believe that there is a need for a balancing act because I think the ultimate goal is to encourage activity,” she said.
The ZSE on Monday, witnessed the listing of the Revitus Property Opportunities Real Investments Trust (Revitus REIT), the second REIT to be listed on the ZSE, after Tigere which was listed last year. Managed and administered by CBZ asset management unit Datvest, the REIT is owned by the NRZ Contributory Pension Fund, in efforts to use owned properties to access liquidity from the capital markets in order to pay member benefits timeously.