Harare, Zimbabwe – Zimbabwe’s capital markets navigated a challenging landscape in the past year, grappling with liquidity constraints, foreign currency shortages, inflationary pressures, and exchange rate volatility that impacted businesses across sectors, according to the Securities and Exchange Commission of Zimbabwe (SECZim).
Acknowledging a “tough year for the capital markets,” SECZim reported mixed results despite the economic headwinds. Total turnover across the Zimbabwe Stock Exchange (ZSE), Victoria Falls Exchange (VFEX), and Financial Securities Exchange (FINSEC) surged nominally by 412 percent to $726.3 billion. However, in US dollar terms, this represented a significant decline of 56 percent to US$198.32 million.
SECZim CEO, Mr. Anymore Taruvinga, disclosed these figures during the regulator’s annual general meeting last week, noting the delisting of two companies from the ZSE in 2023. GetBucks, a micro-finance service provider, delisted in September amidst challenges exacerbated by the central bank’s policy rate hike to 200 percent per annum aimed at curbing inflation.
The capital markets also witnessed two initial public offerings by Revitus and WestPrp Holdings Limited, which were undersubscribed at 18.27 percent and 8.23 percent, respectively. Revitus, Zimbabwe’s second real estate investment trust (REIT), struggled with low investor appetite despite being promoted by the NRZ Pension Fund.
During the year, two advisory firms surrendered their licenses, and one asset management firm faced restrictions on new business activities. SECZim highlighted that by year-end, 48 percent of securities dealers and 41 percent of asset managers were undercapitalized, indicative of a challenging operating environment.
Despite these setbacks, SECZim issued licenses to several capital markets players during the year, including securities advisory, asset management, custody, trusteeship, collective investment schemes, and securities dealing firms.
On a positive note, Funds Under Management (FUM) saw significant growth, increasing by 975.6 percent to $17.22 trillion, while collective investment schemes FUM rose by 1,076 percent to $602.36 billion by the end of December 2023.
In efforts to enhance public knowledge and participation in capital markets, SECZim launched the Capital Market Awareness Index and an Investor Education Toolkit, aimed at providing comprehensive information on investing in Zimbabwean capital markets and their associated benefits.
