Online Reporter
Nelson Gahadza
Senior Business Reporter
ZSE Holdings recorded strong operational and financial growth in the first half of the year, driven by a sharp increase in trading activity, new listings and broader participation across asset classes, as the group continued to build a more diversified capital-markets platform.
Presenting the group’s half-year performance to analysts yesterday, chief executive Mr Justin Bgoni said the Zimbabwe Stock Exchange (ZSE) and Victoria Falls Stock Exchange (VFEX) had more than doubled their combined market capitalisation over the past year, while trading activity had also increased significantly.
Group market capitalisation reached US$7,84 billion at 30 June 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 growth was accompanied by a substantial increase in turnover, with total value traded rising 172.8 percent year-on-year to US$459,07 million.
Mr Bgoni said the performance demonstrated that the market’s re-rating was being supported by genuine trading activity rather than asset-price increases alone.
“Two consecutive halves of growth, funded by real trading activity, not by re-pricing alone,” he said.
According to Mr Bgoni, the stronger market activity translated into significant growth across ZSE Holdings’ core revenue streams, strengthening the group’s operating leverage.
“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 noted that issuer services income increased 17 percent, supported by new listings, ongoing issuer fees and capital-raising activity.
“Growth is broad-based; each principal revenue line grew year-on-year,” he said.
The improved operational performance also fed strongly into profitability.
Group EBITDA rose 196.9 percent to US$2,08 million, while profit after tax increased 275.8 percent to US$1,70 million.
The group’s EBITDA margin expanded to 41.78 percent, well above its internal benchmark of 25 percent, reflecting the benefits of higher revenues against relatively contained cost growth.
Operating expenditure increased by only 5.6 percent to US$3,17 million, significantly below the 39.6 percent growth in revenue.
Excluding a one-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 delivered strong cash generation during the period.
Mr Bgoni said cash and cash equivalents rose from US$391,000 at the end of December 2025 to US$2,27 million at 30 June, representing an increase of US$1,88 million.
Net operating cash flow amounted to US$1,92 million, equivalent to 107 percent of profit before tax, pointing to strong earnings quality and cash conversion.
At the same time, ZSE Holdings maintained conservative gearing, with a debt-to-equity ratio of 6.27 percent and a current ratio of 2.40 times.
The group’s capital requirements also remained relatively low, as investment in its technology platforms neared completion.
Mr Bgoni said only US$33,000 in capital investments were made during the six months, while the group continued to benefit from its migration to AWS cloud infrastructure.
“The lower capital requirement reflects the migration of the group’s platforms to AWS cloud infrastructure,” he said.
During the period under review, three new securities were admitted during the first half, compared with one in the corresponding period.
These included Pfuma Fund REIT, Econet InfraCo and First Mutual Wealth Gold ETF, broadening opportunities for investors to gain exposure to property, infrastructure and gold-backed assets.
“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 provided local investors with their first listed gold-backed exchange-traded fund exposure.
Mr Bgoni noted that the group also recorded two exits from its boards during the period, with Econet Wireless Zimbabwe delisting from the ZSE and African Sun leaving VFEX.
However, he said the companies remained within its broader ecosystem after moving to the VFEX over-the-counter market, allowing the group to retain register-maintenance, trading and related revenue where applicable.
The performance of the two exchanges also highlighted the growing importance of VFEX within the group.
ZSE accounted for US$4,01 billion of market capitalisation and US$292,62 million in value traded, while VFEX had US$3,83 billion in market capitalisation and US$166,45 million in value traded.
Although ZSE generated 60.6 percent of group income, VFEX accounted for 74.4 percent of segment operating profit, underlining its increasing contribution to the group’s profitability.
Looking ahead, Mr Bgoni said the group expected momentum to remain resilient in the second half, although trading activity could normalise from the unusually strong levels recorded 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 capital-raising venue for small and growing businesses, is also expected to diversify 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, Mr Bgoni is forecasting revenue of between US$9 million and US$9,5 million, EBITDA of US$3,3 million to US$3,5 million and profit after tax of US$2,6 million to US$2,8 million.
The group has also declared an interim dividend of US$340,000.
