BY MTHANDAZO NYONI
THE value of shares that were traded on the Zimbabwe Stock Exchange (ZSE) was up 33% in 2018 to $926,3 million, as resurgent inflationary pressures forced investors to seek refuge in equities, an official has said.
In the same period in 2017, turnover was at $694,9 million.
ZSE acting chief executive Martin Matanda told NewsDay that the local bourse recorded strong performance in 2018, compared to the previous years.
The value of shares traded on the ZSE in 2018 was $926 309 644, a 33% increase compared to $694 868 993,31 in 2017, while the volume of shares traded in 2018 was
2 517 356 999, compared to 3 534 058 804 in 2017.
“The increased trading activity can be attributed to the flight to safety by investors who were worried about the negative inflation outlook, resulting in investors seeking inflation hedging instruments such as the stock market and real estate. This resulted in a surge on the demand for shares, leading to increased volumes and higher turnover,” Matanda said.
He said ZSE remained focused on growth through revenue and product diversity, adding the focus in the interim was to implement the revised listing requirements that are in line with recent environmental issues.
“The implementation is expected in the second quarter of the year. Medium term plans involve the launch of new products, specifically the launch of a listing and trading platform for ETFs [exchange-traded funds] and other asset backed securities,” Matanda said.
“The ZSE is also anticipating the full revival of the fixed income board, once the currency and inflation environment stabilises. Longer term plans will see the ZSE increasing its product portfolio to include derivatives and increased adoption of technology in service delivery.”
He said this year, the ZSE anticipates investors to continue flocking to inflation hedging instruments like equities and real estate.
All things being equal, Matanda said this should result in sustained demand for listed securities.
“There are, however, anticipated currency reforms that may change the inflation and investment landscapes in the future and it should be kept in mind that the market will respond to fiscal and monetary policies in one way or another,” he said.
“The ZSE also anticipates new listings in 2019 and supports the initiatives by government on State-owned enterprise reforms. The reforms may lead to some of the entities listing on the ZSE.”