Zimbabwe: ZSE to Host Analysts Forums

22 January 2020

The Zimbabwe Stock Exchange (ZSE) says one of its aims this year is to host forums for analysts as it moves to have an all-encompassing investing analysis for counters listed on the local bourse.

This will provide an investment analysis together with recommendations for all counters as part of efforts to enlighten potential investors on the attractiveness of the listed securities.

ZSE chief executive Justin Bgoni, said this will expose all stocks to potential investors as opposed to focusing on a limited number of counters, mainly big cap counters.

By so doing, potential investors will have a better understanding of what all stocks have to offer and their potential for return on investment. As such, this will encourage and increase activity in all stocks.

"The ZSE aims to promote liquidity for all its listed securities and one of the initiatives will be hosting of analyst forums to encourage analysts to cover all listed counters in terms of investment analysis and recommendations," said Mr Bgoni by email.

However, investors are out to make money and the attractiveness of a company therefore lures them as they seek return on their investment.

Market watchers have also argued that of the active counters, there are certain companies that hardly trade due to their unattractiveness, for instance ZECO Holdings.

Mr Bgoni indicated that, despite spending an entire year without recording any trades such companies are still eligible to remain listed on the bourse as long as they meet the listing requirements.

"Companies can only be de-listed for failing to comply with the ZSE listing rules. It is possible that a company may comply with ZSE listing rules but its securities may not be actively traded.

"Such companies cannot be dismissed from listing because secondary market trading is depended upon investors actions. In terms of market data, an inactive company means it lags behind in terms of contribution to turnover and liquidity," he said.

Last year trades were concentrated in the market's blue chip firms, Delta, Econet, Cassava, Old Mutual and Innscor, who accounted for over half of the total value traded in the year.

Old Mutual was the most traded stock in 2019 accounting for 20 percent of the total value while Delta and Econet followed at 17 percent and 16 percent respectively.

Blue chip firms remain attractive especially with foreign investors due to their strong cash generating businesses which makes them adapt to the volatile environment better than others. Consistent dividend policy also makes some counters attractive ahead of others.

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