BY MELODY CHIKONO
THE Zimbabwe Stock Exchange (ZSE) has paid tribute to companies for their resilience during the Covid-19 pandemic disruptions which saw the bourse being suspended for a month in 2020 but managed to trade over ZW$17 billion (US$200 million).
In his presentation at the Zimbabwe Independent Quoted Companies Survey awards yesterday, ZSE business development manager Anymore Taruvinga said the stock exchange was providing platforms to ease financial challenges facing companies.
“Some of the products include ZSE Direct, which is an online trading platform for retail investors who have been part and parcel of capital markets.
“ZSE Direct is convenient and traders can do business from wherever they are; in the comfort of their homes. In October 2020 we moved to launch the Victoria Falls Stock Exchange which is meant to raise capital in hard currency for our productive sectors. We did not dollarise the stock exchange but established a separate bourse that would service the market better. We had the listing of SeedCo International which was a major step ahead,” Taruvinga said.
The ZSE remained relevant in 2020 as there was over 1000% growth on the benchmark index which was far above annual inflation which was at 349% at the close of 2020. The percentage growth was thus three times higher in terms of inflation hedging.
“The returns made us a haven for preserving value. We also saw that liquidity was high in 2020 as we got ZW$17 billion worth of trade. For the five months to May 2021, and the few days until yesterday, we have seen turnover which covered almost all that was achieved last year,” Taruvinga said.
He lauded companies for taking innovative measures in the face of Covid-19 by introducing remote working and moving towards renewable energy to combat power cuts.
“The ZSE has also introduced solar power which speaks to innovation and adaptation to the environment. As challenges, we lost a number of listings but we are optimistic that we will have new listings,” Taruvinga said.
He said a new listing was expected by Real Estate Investment Trust (Reits) which increases optimism and paints a positive economic outlook for 2021.
This comes after the Finance and Economic Development ministry allowed for the listings through the amendments of the Finance Act.
Reits, which will be established on the ZSE and the VFEX, is expected to present opportunities for pension funds and other institutional investors to issue property derivatives that can improve cash flows.
Investing in property is seen as a way to hedge funds against inflation in the long-term. Property investments are typically illiquid assets, that is, they cannot be easily exchanged for cash.
Taruvinga said Reits was expected to bring liquidity to the pensions fund and the real estate sector.
“We are looking at the listing of Reits this year. This has been made possible through the provisions of the Finance Act. It is a product we think will bring liquidity to the pension sector and to real estate which traditionally is an illiquid asset. We are also expecting new listings on the VFEX and as we have been working hard to get new listings, we are also working on a corporate listing on the exchange,” he said.
Recently, the insurance and pension regulator indicated that it was in the process of engaging the government to review the limit of 50% participation in real estate investment trusts (Reits) by pension funds having already flagged the issue to the Treasury.
Meanwhile Taruvinga bemoaned the de-listings on the local bourse saying they were an indication of the difficult economic terrain but said the ZSE remains optimistic based on the economic growth projections this year.
Dawn Properties Limited, ZPI, Powerspeed and Falgold delisted from the ZSE last year.
Dawn Properties merged with Africa Sun, while ZPI merged with ZHL and SeedCo International merged with SeedCo Limited.
Taruvinga, however, said this was an indication that companies had come to the realisation that companies can really do better working together.
The executive chairperson of a South African fintech company, Riskflow, Daan Mare, who was the guest of honour said companies needed to be innovative in an ever-changing environment.
He said companies should adapt to the digital era in the advent of the Covid-19 pandemic.
Alpha Media Holdings (AMH) chief executive officer Kenias Mafukidze said this year’s Quoted Companies Survey was held at a time when companies were battling with Covid-19 but managed to make profits. He said the ZSE managed to give a return to investors.
“It’s in the exchange that we find exciting. These winners have demonstrated that we can prevail against all odds. We find hope and inspiration. We will derive strategies for winning tomorrow.”
Mafukidze also paid tribute to various partners to this year’s Quoted Companies Survey winners. Quoted Companies Survey sponsors, Nedbank Zimbabwe head of corporate and institutional banking Norman Gambiza said the economic environment had not been easy given the Covid-19 pandemic from 2020.
“When we started 2020, we thought Covid-19 was an issue of the Far East but it came upon us and we experienced hard lockdowns. We believe that the quoted companies set an example that other businesses can follow. Businesses have come up with products that compete on the global stage,” he said.