Lockdown delays listing of Exchange Traded Fund

THE Covid-19 pandemic has forced the Zimbabwe Stock Exchange (ZSE) to delay the listing of its inaugural Exchange Traded Fund (ETF), which was earmarked for the end of the first quarter of 2020.

By Melody Chikono

The bourse says it hopes the public health crisis will eventually subside to allow the project to move ahead.
Last year, the ZSE launched ETFs as part of efforts to offer wide investment choices.

An ETF is an investment fund traded on a bourse, like a basket of stocks. These could be indices comprising a clutch of related stocks such as mining, agriculture and technology, among others.

On Wednesday, ZSE chief executive Justin Bgoni would not divulge details of the upcoming listing, saying it was impossible before the issuer publishes the pre-listing statement.

“We expected the listing by the end of the first quarter 2020 but the breakout of coronavirus caused a delay in the project. The ZSE hopes that the pandemic will be brought under control soon in order to progress with the project. Detailed announcements of potential listings are, however, not possible before the issuer publishes the pre-listing statement. The ETF listing will positively impact the market as it adds to the basket of investable securities,” Bgoni said.

The 21-day Covid-19 lockdown has had an impact on listed companies, negatively affecting activity on the ZSE.
The lockdown has seen a decrease in trading volumes and turnover figures on the market as players shift their focus on surviving the 21 days without business activity.

The month of March saw no new listings on the ZSE equities and debt markets. On the securities depository front, the number of securities on-boarded on the Chengetedzai Securities Depository remained unchanged during the month.

In that period, the ZSE equities market weakened, shedding 4,05% to close the month with a total market capitalisation of ZW$58,52 billion compared to ZW$60,99 billion as at end of February 2020.

Consequently, the depository’s CE Campbell Musiwa said the market value of the securities that are placed on the platform also declined by 9,09% from ZW$31,70 billion as at February 29 2020 to ZW$28,81 billion as at March 31.

Dematerialised securities accounted for 49,23% of the ZSE equities market capitalisation as at March 31, 2020.

“ZSE equities market turnover increased for the third consecutive month to close the month of March, 2020 at ZW$425,61 million. This represented an increase of 18% compared to February 2020. The cumulative number of trades processed in 2020 closed at 10 990,” he said.