The Zimbabwe Stock Exchange (ZSE) anticipates more new capital markets products with the first Real Estate Investment Trusts (REITs) listing expected this year.
A REITs is a regulated investment vehicle that enables the issuer to pool investors’ funds for the purpose of investing in real estate. In exchange the investors receive units in the trust and as beneficiaries of the trust share profits from the real estate assets.
ZSE announced the REITs listings in 2020, but listings have been taking longer to debut on the bourse with issuers demanding more investor friendly regulations.
Indications from the bourse are that a couple of issuers are interested in putting up their properties on the ZSE.
ZSE chief executive officer, Justin Bgoni, said discussions were already underway with pension funds, for instance, who are interested in listing their properties.
“The potential listings are at an advanced stage and we are hopeful that we will witness some listings this year,” said Mr Bgoni via email.
“The Zimbabwe Stock Exchange is talking to some pension funds that want to list their properties on the ZSE,” he said.
This comes as the ZSE has been making efforts to diversify its product offering as part of initiatives to make the bourse an attractive investment option.
Such initiatives are also expected to increase participation and enhance liquidity on the bourse.
“We will witness increased participation on the bourse, especially from retail investors. With the addition of new products on the exchange, we will see some new listings and significant growth on the bourse,” he said.
Already, there has been notable increase in retail participation on the market following the launch of new products and platforms that enhance accessibility to the market, such as the ZSE Direct.
Said Mr Bgoni: “In 2021, we managed to gain traction on the projects we were working on, the awareness of investing on the ZSE grew, as we witnessed increased participation especially from the retail investors.
“We witnessed the increase in valuation especially for the small and medium cap counters due to the increase in retail participation particularly in those counters.
“Some of the products we had been working on such as the Exchange Traded Funds (ETFs) also gained traction in 2021, with people gaining a better understanding of the product.”
During the past year, the ZSE witnessed the launch of the second Exchange Traded Fund — the Morgan and Co Multi Sector ETF in December with its listing in 2022, after the Old Mutual ZSE Top 10 ETF.
The Receivables market also gained traction in the course of the year as the bourse managed to sign two big suppliers — Edgars and OK Zimbabwe on the Zimbabwe Receivables Marketplace(ZRM) platform. The bourse also signed financier — Datvest. This was in addition to the launch of the ZSE Depository.
These are part of the ZSE’s initiatives to diversify the bourse under its five-year strategy to 2025.
Other initiatives include introduction and launch of the ZSE Training Institute, the Victoria Falls Stock Exchange (VFEX), an exchange denominated in United States Dollars and enables companies to raise capital in hard currency. A year after its launch, the VFEX now has four counters — Seed Co International, Padenga and resources groups — Bindura and Caledonia with more listings expected in the near future.