HomeBusiness DigestCapital markets: Innovation in a disrupted environment

Capital markets: Innovation in a disrupted environment

THE Zimbabwe Stock Exchange has stood the test of time over the years and remains the backbone of the country’s capital markets.

Dating back to 1894, the ZSE has evolved, from the automation of the exchange in 2015,

demutualisation in 2017, roll out of View Only Terminals in 2017 and roll out of ZSE Direct, an online trading platform, in 2020.

The ZSE has also complemented its traditional service offerings with training to ensure both prospective issuers and investors are equipped with the right information and know-how. This has enabled the bourse to remain resilient despite the changes in the economic environment.

Over the years the ZSE has remained relevant as an avenue for long-term capital creation and investment and this has been due to the stature of the underlying security issuers. The profile of the ZSE has, as expected, changed over the years, but today the 55 currently listed entities represent the breadth of the Zimbabwean economy from primary extraction industries to service firms.

This year’s theme of the Zimbabwe Quoted  Companies Survey; “Business Innovation and Enterprise in a Disrupted Environment” resonates with the tumultuous periods that both the economy and capital markets have gone through. The impact of Covid-19 was felt both at business and personal level.

Not only did it hit the local economy but led to bankruptcies and job losses in the most advanced economies. Covid-19 is amongst us, and now is the time for businesses to think beyond Covid-19, come up with survival strategies and be innovative and change business models. Now is also the time for adaptability and flexibility as business innovation is no longer an option but an absolute necessity.

In a disrupted environment, collaboration, not competition is the way forward. For the ZSE, this means building collaborative ecosystems that enhance better services for our stakeholders. This is the route that the ZSE has undertaken in order to create value to its stakeholders.

The ZSE entered a joint venture with Harare Receivables Exchange (“HRE”) and launched the Zimbabwe Receivables Marketplace (ZRM) in September 2020. ZRM provides a platform where suppliers of quality buyers (listed companies) can discount their receivables to access working capital.

Such a solution by the ZSE can assist not only the listed companies but also small-to-medium enterprises to access working capital for the survival of their businesses.

It was also crucial for the exchange to proffer innovative solutions that add value for investors and the listed entities and as a result the ZSE launched the Victoria Falls Stock Exchange (VFEX) in October 2020. VFEX trades in United States dollars and is meant to attract both local and international issuers by providing opportunities to diversify investment portfolios and hedge against exchange rate risk.  VFEX is currently working on establishing a junior mining board targeted at small-scale miners.

The junior mining board will include lower capital requirements and have less stringent rules whilst allowing junior exploration and mining companies to participate.

The ZSE appreciates that the Quoted Companies Survey remains integral to the capital markets, having been part of the capital markets for over 24 years. The Quoted Companies Survey provides an independent gauge on how the ZSE Issuers have performed.

Whilst the ZSE takes pride in all its issuers, it also recognises the independent analysis that seeks to reward those that are deemed outperformers. In the eyes of the ZSE, all issuers are winners taking cognisance of the bold steps taken by Issuers in making their affairs public by listing on the ZSE.

Listing is indeed a hallmark of the intent to abide by the highest corporate governance standards and the willingness to be publicly scrutinised both at business and personal level.

Listing is also a testament to focus on sustainable business decisions and the consideration of all stakeholder concerns. Listing is not an easy route when you have to expose yourself to competition and public scrutiny.

To all the issuers, the ZSE deems you our ambassadors and economic heroes and we salute you. The ZSE also congratulates the singled out winners and takes pride in their achievements.

In conclusion, operating in a disrupted environment requires a shift in dynamics as continuing with existing operating models may not suffice for businesses. It is therefore crucial for listed companies to stay involved in developments at the frontiers of innovation by testing out and piloting new technologies.

For any business to survive, innovation and agility is required. Capital markets are also evolving and the ZSE remains committed to continue adapting to the environment to ensure that it remains relevant. New products such as REITs and commodity backed ETFs will be pursued to ensure there is market and product diversity going forward.

  • For any further information, you can contact: Email: info@zse.co.zw . Website: www.zse.co.zw

Recent Posts

Stories you will enjoy

Recommended reading