ZSE outperforms regional bourses
The Zimbabwe Stock Exchange (ZSE) fared well in its performance compared to its regional peers last year in US dollar terms, according to the African Financials’ subSahara Africa Top 30 Companies report.
The report says regional stock markets, excluding South Africa’s, rose by an average 4,5
percent in US dollar terms in December 2022.
The growth, according to the report, is a significant achievement as it is driven by strong
earnings growth and overvalued stocks.
However, on average, they are down by 11,6 percent year to date. The report shows ZSE
paced the fastest during the month of December with a 43 percent increase followed by
Ghana and Seychelles with gains of 31 percent and 18 percent, respectively.
While the local currency-denominated ZSE has faced challenges in the last year including
high transaction costs and acute regulation, the bourse managed to record gains
surpassing regional peers.
The report also highlights companies from the region that managed to reach the US$800
million capitalisation mark during the year such as Australia Stock Exchange-listed
platinum producer — Zimplats valued at US$1,87 billion.
“The key markets in sub-Saharan Africa that have done well include Nigeria and
internationally listed stocks, which make up about 35 percent of the top 30 companies.
“Additionally, the telecoms and technology sector has also seen growth with new
listings, including companies such as UAC foods in Nigeria, UAC cement in Nigeria,
Orange Code d’Ivoire, and African Oil.
“However, there are very few companies from South Central Africa, including Zimbabwe,
Zambia, Malawi, Botswana, and Namibia, that have reached the critical level of market
capitalisation of US$800 million,” reads part of the report.
But the report highlights that despite companies in the regions still lagging behind the
US$800 million capitalisation mark, the year 2022 was a good year which saw them
record growth in earnings at a time other global businesses have struggled with massive
job cuts, losses and low investor confidence.
Big companies like Amazon have lost as much as over US$800 billion in market
capitalisation in 2022 alone, as the tech giant battled diluted consumer demand and job
cuts.
“In the year to September 2022, sub-Saharan Africa’s markets, excluding South Africa,
have performed relatively well compared to international markets. This is a significant
achievement as it is driven by strong earnings growth.
“Another interesting aspect is the level of profitability of these companies, many of
which have shown significant earnings growth and positive growth of US dollar earnings
in 2022, even while other markets are facing issues of profitability and indebtedness,”
says the report.
During the year, businesses world over were affected by the adverse impacts of the war in
Ukraine, which caused supply chain disruptions.
This came at a time economies were still trying to recover from the effects of the Covid19 pandemic.
Despite these challenges, listed companies reported positive earnings performances for
the year driven by firm demand.
Companies like Delta reported increased volumes performance for the nine months to
December 31, 2022 on the back of solid demand across segments.-The Herald
