THE Zimbabwe Stock Exchange (ZSE) is targeting $250 million in annual turnover by year end despite the sluggish performance of the bourse due to the slowdown in the economy, a company executive has said.
BY TARISAI MANDIZHA
Speaking at the Institute of Chartered Accountants of Zimbabwe Chief Finance Officers forum in Harare yesterday, ZSE chief executive officer Alban Chirume said ZSE turnover had declined to $203,3 million as of October from the peak of $485,7 million in 2013. Last year, turnover was $452 865 752,17.
“Yes, the market has been on a downward trend. In the 1990’s the ZSE turnover was over $2 billion and we were once the largest stock exchange in Africa, but now Botswana is bigger in terms of its turnover and also Kenya is doing very well.
“ZSE turnover was at $485,7 million in 2013 and has significantly dropped to $203,3 million in October 2015, which is the lowest since 2009. We are targeting to reach $250 million by year end,” he said.
Capital market players had projected a huge jump in turnover this year aided by the introduction of an electronic share register and the automated trading system that would lure more foreign investors on ZSE.
Chirume said ZSE performance had recorded negative returns, dropping by 35% for the period January 2013 to October 2015, while market capitalisation fell 34% to $3,4 billion as at October from a peak of $5,2 billion in 2013.
Chirume said the depressed market was attributed to weak commodity prices, weak company and economic fundamentals, among others.
He said ZSE has facilitated 25 rights issues, four private placements and two convertible debentures since 2009.
Chirume said ZSE had managed to raise $326,4 million through several companies this year.
He, however, said the bulk of the money was channelled to pay off expensive short-term borrowings.
“The expensive debt was suffocating the affected companies and without the ZSE alternative, the number of corporate failures might have been worse,” he said.
The ZSE boss said three companies would have joined the bourse by the end of the year. To date, Proplastics and Simbisa are the new entrants on the bourse, having been unbundled from Masimba Holdings and Innscor, respectively.
“A number of companies in Zimbabwe are not listed, but we see lots of opportunities. Every time I look around, I get excited, I see that there are so many companies and they are not listed and they can be listed,” he said.
Chirume said the performance of the ZSE was affected by limited pools of capital, lack of capital market policy, limited product offering, week corporate governance culture and legal barriers such as foreign ownership restrictions, among others.