ZSE doubles market capitalisation

ZSE Holdings delivered strong operational and financial results in the first half of the year, driven by a sharp rise in trading activity, new listings and growing investor participation across a wider range of asset classes.

The performance reflects the group’s continued efforts to build a more diversified and resilient capital markets platform, with both the Zimbabwe Stock Exchange (ZSE) and Victoria Falls Stock Exchange (VFEX) contributing to the growth.

Presenting the group’s half-year results to analysts yesterday, chief executive Mr Justin Bgoni said the two exchanges had more than doubled their combined market capitalisation over the past 12 months, while trading volumes and investor activity also recorded significant growth.

Group market capitalisation stood at US$7,84 billion as at June 30, 2026, representing a 112.9 percent increase from the same period last year and a 38.6 percent rise from the second half of 2025.

The increase was accompanied by a substantial jump in market activity, with the total value traded rising by 172.8 percent year-on-year to US$459,07 million.

Mr Bgoni said the results showed that market growth was being driven by genuine trading activity rather than simply rising asset prices.

“Two consecutive halves of growth, funded by real trading activity, not by re-pricing alone,” he said.

According to Mr Bgoni, the stronger trading environment translated into impressive growth across the group’s key revenue streams, reinforcing the effectiveness of its business model.

“Revenue increased 39.6 percent to US$4,97 million from US$3,56 million in the comparable period.

“Trading income was the biggest contributor to the improvement, rising 152 percent following the sharp increase in market turnover, while depository income surged 213 percent on higher settlement activity,” he said.

He said issuer services income also grew by 17 percent, supported by new listings, recurring issuer fees and capital-raising activity.

“Growth is broad-based; each principal revenue line grew year-on-year,” he said.
The stronger operational performance translated into robust profitability growth during the six-month period.
Group earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 196.9 percent to US$2,08 million, while profit after tax increased by 275.8 percent to US$1,70 million.
The group’s EBITDA margin expanded to 41.78 percent, comfortably exceeding its internal benchmark of 25 percent and reflecting the benefits of rising revenues against tightly controlled costs.
Operating expenditure increased by just 5.6 percent to US$3,17 million, substantially lower than the 39.6 percent growth recorded in revenue.
Excluding a once-off impairment charge of US$106 000, operating costs increased by only 2.1 percent.
“Costs rose only 5.6 percent against income growth of 39.6 percent – strong operating leverage,” he said.
The group also generated strong cash flows during the period, further strengthening its financial position.
Mr Bgoni said cash and cash equivalents increased from US$391 000 at the end of December 2025 to US$2,27 million as at June 30, representing a rise of US$1,88 million.
Net operating cash flow reached US$1,92 million, equivalent to 107 percent of profit before tax, highlighting the quality of earnings and strong cash conversion.
At the same time, ZSE Holdings maintained a conservative balance sheet, with a debt-to-equity ratio of 6.27 percent and a current ratio of 2.40 times.
Capital expenditure remained relatively low as the group’s major technology investments approached completion.
Mr Bgoni said only US$33 000 was invested in capital projects during the period, while the company continued to benefit from migrating its platforms to Amazon Web Services (AWS) cloud infrastructure.
“The lower capital requirement reflects the migration of the group’s platforms to AWS cloud infrastructure,” he said.
The first half of the year also saw increased activity on the listings front, with three new securities admitted compared to one during the corresponding period last year.
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The new listings included Pfuma Fund REIT, Econet InfraCo and the First Mutual Wealth Gold ETF, offering investors exposure to property, infrastructure and gold-backed investment products.
“Pfuma Fund REIT raised US$25 million, while Econet InfraCo added approximately US$1 billion to market capitalisation, making it the largest single admission during the period,” said Mr Bgoni.
He added that the First Mutual Wealth Gold ETF gave local investors access to the country’s first listed gold-backed exchange-traded fund.
During the period, the group also recorded two exits from its exchanges, with Econet Wireless Zimbabwe delisting from the ZSE and African Sun leaving the VFEX.
However, Mr Bgoni said both companies remained within the broader ecosystem through the VFEX over-the-counter market, enabling the group to retain register maintenance, trading and related revenue streams where applicable.
Performance across the two exchanges underscored the growing significance of VFEX within the group.
The ZSE accounted for US$4,01 billion in market capitalisation and US$292,62 million in value traded, while VFEX recorded market capitalisation of US$3,83 billion and turnover of US$166,45 million.
Although the ZSE contributed 60.6 percent of total group income, VFEX generated 74.4 percent of segment operating profit, highlighting its increasingly important role in driving profitability.
Looking ahead, Mr Bgoni said management expected business momentum to remain strong in the second half of the year, although trading activity could moderate from the unusually high levels seen in the first six months.
“The visible pipeline of resource, financial services and property listings on VFEX, together with increased corporate transactions and product diversification, is expected to support performance,” he said.
Mr Bgoni said the Zimbabwe Entrepreneurship Exchange (ZEEX), which provides a regulated platform for small and growing businesses to raise capital, was also expected to broaden the group’s revenue base.
“New admissions, corporate transactions and broader product participation should partially offset lower trading income,” he said.
For the full year, the group is projecting revenue of between US$9 million and US$9,5 million, EBITDA of between US$3,3 million and US$3,5 million, and profit after tax of between US$2,6 million and US$2,8 million.
ZSE Holdings also declared an interim dividend of US$340 000, reflecting confidence in its earnings outlook and financial position.