ZIMBABWE’S capital markets have remained stable despite changes in investment allocations and market activity, the Securities and Exchange Commission of Zimbabwe (SecZim) has said.
In its fourth-quarter 2024 capital market newsletter, SecZim said the number of regulated entities had risen to 220.
According to the report, the Victoria Falls Stock Exchange (VFEX) All-Share Index dropped by 1,46 percent to close at 104.09 points in the quarter to December 31, 2024.
However, it gained 47,7 percent for the year.
Similarly, the Zimbabwe Stock Exchange (ZSE) ZSE All-Share Index had a quarterly drop of 11 percent to close at 217.58 points.
“Since the rebasing of indices upon the introduction of the Zimbabwe Gold (ZiG), the ZSE All-Share Index closed the year with a return of 117,5 percent from 100 points as at April 5, 2024,” reads part of the report.
VFEX turnover, SecZim noted, registered a quarterly growth of 246 percent to US$26,9 million in the fourth-quarter period.
“Market activity during the quarter was exceptionally high on the back of increased demand for a safe haven and special negotiated trades amounting to US$17,6 million in Innscor, Axia and Simbisa,” says the report.
On the other hand, ZSE turnover for the fourth quarter, at ZiG1,01 billion (or US$37,5 million), represented a 15,6 percent decline in USD terms from the third quarter, reflecting the depreciation of the local currency during the period under review.
Market capitalisation resultantly shrank by 10,2 percent from the previous quarter to close Q4 2024 at US$3,87 billion, largely due to the depreciation of ZiG, thereby reducing the year-to-date return from 8,1 percent as at September 2024 to 2,9 percent as at December 2024.
During the quarter under review, Meikles Limited securities were suspended from trading to allow for realignment with listing rules.
On the other hand, Bridgefort Capital Limited and the Old Mutual Top Ten Exchange-Traded Fund were delisted during the period under review following the issuers’ application for voluntary termination.
For the quarter, total funds under management (FUM) of asset managers stood at ZiG90,2 billion, representing a 2,89 percent decline from ZiG92,84 billion recorded in the previous quarter.
“The total FUM as at December 31, 2024 include USD-denominated FUM of US$1,87 billion, which was translated to local currency (ZiG) at the prevailing exchange rate as at December 31, 2024. Despite the overall decline in the FUM, USD-denominated funds under management increased by 6,39 percent from US$1,76 billion as at September 30, 2024,” reads part of the report.
SecZim noted a significant drop in the investment management sector’s exposure to the stock market from 40,5 percent recorded in the prior quarter to 32,3 percent.
But FUM invested in property increased from 43,6 percent recorded in the previous quarter to 47 percent, while money market investments increased from 4,72 percent recorded in September 2024 to 6,97 percent reported on December 31, 2024.
“Investment in unquoted equities increased to 4,26 percent from 3,68 percent recorded as at September 30, 2024 and exposure to bonds increased from 4,97 percent recorded in the prior quarter to 6,37 percent,” said SecZim.
Cash/call deposits and other investments all account for the remaining 3,05 percent investment exposures for the asset management industry.
During the quarter under review, the number of active registered collective investment schemes (CIS) stood at 48, and the number of unitholders declined to 80 381 from 81 017 recorded in the previous quarter.
CIS denominated in ZiG stood at ZiG1,60 billion, up by 5,85 percent from ZiG1,51 billion recorded as of September 30, 2024.
The total funds under management for CIS funds that are denominated in USD amounted to US$72,94 million, which is a 4,32 percent increase from US$69,92 million recorded in September 2024.
In terms of investor activity, during the quarter under review, ZiG1,03 billion worth of trades were settled through Chengetedzai Depository Company (CDC) and the ZSE Depository.
Corporations purchased 42,1 percent (ZiG435,05 million) of the total shares; followed by nominee accounts, which accounted for 24,3 percent (ZiG250,76 million); and individual investors at 3,33 percent (ZiG34,37 million) of the total shares.
For the quarter under review, a total of US$26,96 million worth of trades were settled through the VFEX Depository.
Corporates purchased 79,7 percent (US$21,5 million) of the total shares; followed by pension funds, which accounted for 14,46 percent (US$3,9 million).
Individual investors purchased 3,5 percent (US$952 213) of the total shares.
On the selling side, corporates disposed of the highest value of shares worth US$21,6 million; followed by individuals, who disposed of US$2,98 million worth of shares.
According to IH Securities, the performance of the ZSE still depends heavily on money supply dynamics.
VFEX, it said, remains healthy despite the delisting of National Foods in February.
Pricing on the bourse has remained stable.
“For the month of April, we expect activity to be supported by dividend reinvestments from the recently released December year-ends. In the absence of capital appreciation, we are propelled towards defensive stocks that have strong dividend policies,” added IH Securities. – Herald Online
