New product offerings bolster ZSE annual revenue

THE Zimbabwe Stock Exchange Limited (ZSE) revenue for the year to 31 December 2020 rose six percent to $123,4 million driven by new product offerings.

During the review year, the ZSE introduced several products aimed at enhancing efficiency of the bourse as well as boost retail participation.

These include the ZSE Direct, which was launched in September, which has managed to make investments much easier for the retail market as well as the Zimbabwe Receivables Marketplace in August, which is expected to provide working capital solutions through receivables discounting.

Other initiatives that later followed to increase product offerings and investor awareness include the ZSE Training Institute in February, which provides customised capital markets training.

In December 2020, the bourse also launched the Old Mutual ZSE Top 10 ETF to diversify product offerings on the exchange.

In a statement accompanying the ZSE’s financials for the year under review, chairperson Caroline Sandura said the new product offerings helped push ZSE’s revenue for the year under review.

The business achieved an operating profit of $0,86 million, which was a 98 percent reduction from $54,8 million in 2019 weighed down by impairment of unquoted investment.

By end of the review year, the bourse recorded basic loss per share of 54,49 cents from earnings per share of 119,10 cents.

Operating expenses went down by five percent to $88,2 million on cost containment measures.

Mrs Mrs Sandura highlighted that operating costs were mainly driven by the incorporation and launch costs of the Victoria Falls Stock Exchange (VFEX) while an increase in staff costs was due to the increase in the head count for the ICT developers set up to implement the ZSE mobile application and other ICT related matters.

Total asset doubled to $211,8 million compared to $105,8 million recorded during the comparable year on the back of new business such as VFEX Limited and incorporation of a new entity – Zimbabwe Receivables Market (ZRM), an invoice discounting entity, which is a joint venture with Harare Receivables Exchange.

Interest bearing borrowings more than doubled to $28,5 million from $11,178 to support working capital and capex. Cash flows generated from operations improved to $25 million from an outflow position of $36,2 million on account of improved working capital management.

Said Mrs Sandura: “In line with the group’s growth strategy and income streams diversification, ZSE Direct mobile application was internally developed to promote retail investors participation on the equities market. The Group also established a depository arm which will facilitate and support launch of new products.”

During the year under review, the exchange enjoyed a bull run with total market capitalization surging by 968 percent to $317 billion while value of trades increased by 754 percent to $17,3 billion in 2020.

But inflationary pressures had an adverse impact on the exchange which resulted in its temporary closure on June 26, 2020 and reopened on August 3, 2020. This also resulted in the suspension of dually listed firms – Old Mutual PLC, PPC Limited as well as Seed Co International Limited, which later listed on the VFEX.

There were no listings during the year but Falgold and ZPI delisted on November 10, 2020 while Powerspeed delisted from on December 18, 2020. Seed Co International delisted from ZSE on October 23, before listing on XFEX on October 26, 2020.

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