Chronicle Editor
Pride Mahlangu, Business Reporter
THE Zimbabwe Stock Exchange (ZSE) has introduced sectoral indices designed to represent the trading performance of different companies listed on the local bourse.
ZSE said the unveiling of sectoral indices beginning this month, follows the adoption of the Global Industry Classification Standard (GICS) in classifying the listed companies.
“The new sectoral indices with effect from January 1, 2020 are as follows, ZSE material index, ZSE financial index, ZSE consumer discretionary index, ZSE industrial index, ZSE real estate index, ZSE information and communication and technology service index,” said ZSE.
“ZSE top 10 Investable Index, ZSE top 10 Index, ZSE top 15 index, ZSE top 25 index, medium cap index and small-cap index.”
Before the reclassification, trading performance of listed firms was classified in the mining and industrial indices.
ZSE stated that the above quantitative indices constituents will be reviewed at the end of each quarter.
Indices allow investors to gain an insight into the performance of an asset class or a segment of that asset class.
The indices are also used as the underlying for various financial instruments and to benchmark the performance of portfolios designed to replicate the performance of a given asset class.
“The new ZSE indices have been reclassified to provide the market with better tools for performance measurement as well as assist in sector-based investment strategies,” said the ZSE
Meanwhile, the equities market closed positive in 2019 yielding a 57 percent gain as investors turned to stocks as a safe haven for investment.
The year was characterised by economic volatility mainly due to inflationary pressures, which helped push demand for stocks as other investment channels such as the money market became unattractive.
Currency reforms were among the top highlights for the year which saw the Reserve Bank of Zimbabwe establish an interbank market for foreign currency, introduction of local currency and banning of foreign currency for local transactions with the exception of other sectors such as tourism.
The conversion from a multi-basket of currencies to a local mono-currency meant an increase in local dollars’ liquidity, which found its way on the stock market.
However, the policy changes also had a knock-on effect over investor confidence as the market witnessed a wait and see attitude by foreign investors.— @pridesinstinctz
Online Reporter