ZSE ASI cashed in on poor local currency in 2023

The Zimbabwe Stock Exchange (ZSE) All Share Index saw an impressive 981.54 percent growth, closing the year on December 31, 2023, at 210,833.92 points.

ZSE chief executive officer, Justin Bgoni, attributed this growth to “an overall uptrend in local prices” as the ZSE predominantly operates in local currency. He noted that “the returns on the ZSE were positive compared to the official exchange rate which experienced a depreciation of 792 percent.”

Market activity on the ZSE surged significantly, with total turnover reaching $555 billion, a 320 percent increase over the previous year’s figures, highlighting an expansion in trading volumes.

The performance of both the ZSE All Share Index and the VFEX All Share Index in 2023 underscored the diverse market dynamics in Zimbabwe’s financial markets, reflecting the complexity of the country’s investment landscape.

Despite a generally positive outlook, the Victoria Falls Securities Exchange (VFEX) All Share Index experienced a notable decline of 28.86 percent, ending the year at 70.48 percent.

However, it recorded a 113 percent gain in market capitalisation, closing the year at USD$1.18 billion. “The VFEX All Share Index experienced a decline of 28.86 percent throughout 2023, ultimately closing at 70.48 percent,” said Bgoni.

He highlighted that “the equities market was the dominant force driving 98 percent of the overall turnover, while the real estate investment trusts (REITs) and exchange – traded funds (ETFs) board accounted for 2 percent of the total market activity.”

VFEX experienced remarkable growth in 2023, with turnover soaring to USD$26 million, a 116 percent increase compared to the prior year. This growth was largely credited to the significant expansion in the number of listings on the exchange, bolstering market activity and investor participation.

In recognition of ZSE’s strong financial performance, the board declared “a dividend payment of ZiG 5.25 per share and USD 0.88 per share in relation to the financial performance of the Group in 2023,” according to Caroline Sandura, the chairman of ZSE.

Anticipated currency reforms in the nation are expected to enhance economic stability and confidence, positively impacting ZSE’s trading activities and driving long-term growth and investor confidence.

“The diversification of products on VFEX is also expected to play a significant role in the exchange’s growth prospects,” said Bgoni.-ebusinessweekly