daniel chigunwe
Business Writer
The Zimbabwe Stock Exchange (ZSE) has seen an uplift in market capitalisation year to date (YTD) of 78.41 percent in real terms to US$2.61 billion, making it one of the best performers in relative terms in African markets, an equities research firm has said.
Stock broking and equities research firm, IH Securities, in its equity strategy year-to-date review, said average daily traded in real terms for the period registered at US$0.32 million from US$0.56 million in the previous year, which marks a 42 percent decrease year on year.
“Notably, average daily value traded fell to US$0.05 million in March and April this year as the market adjusted to the introduction of the new currency. “Liquidity, however, improved, peaking in July 2024,” IH said.
In individual performances, it said FBC saw a growth of 235 percent in real terms, followed by Mash with 225 percent, and NTS with an uplift of 173 percent, closing out the top three performers for the period under review.
IH said Bridgefort and Zeco notably lagged behind in performance on the exchange in the period. “The larger economic environment remains challenging, characterised by a fluid policy environment.
“Whilst prices on the ZSE have returned into buying territory, we are in favour of agile companies that can navigate the current environment, and in the absence of capital gains, those that are consistent dividend payers,” the firm said.
The research firm said activity on the Victoria Falls Stock Exchange (VFEX) has remained steady, with a slew of new listings in the year.
Retailer, Edgars, migrated its listing from the ZSE, and in 3Q24, the offshore financial services centre welcomed the listing of Invictus Energy depository receipts as the 16th listing on the bourse.
Additionally, contracts for differences were also launched on the exchange.
“Whilst liquidity on the bourse has been an area of concern since inception, YTD average daily value traded to the 28th of October increased 84 percent to US$0.16 million from US$0.09 million in the comparable period,” reads the IH report.
Heavyweight, Innscor, saw shares worth US$12.92 million trade hands, while Simbisa followed at US$8.51 million.
IH said the pipeline of counters migrating to the VFEX remains steady, with the bourse aiming to secure four additional listings by the end of the year, with the most recent announcement of intent to list coming from mineral exploration company Kavango Resources.
The exchange is also planning to launch the Commodities Exchange in Q4, and the rules governing its operation have been finalised.
“The commodities exchange is expected to boost market liquidity in addition to diversifying investment options,” said IH.
In the outlook to 2025, IH said it expects that the monetary space will remain delicate, with a likelihood of policy shifts in the event that the rate becomes unstable.
It said a forecasted improved summer cropping season will likely see a revival of downstream value chains. However, there remains some downside risk if La Nina conditions do not materialise.
“Given the indeterminate outlook, we are in favour of investing in select consumer-facing companies with some defensive offerings such as Innscor,” IH said.
Bongani Ndlovu