11 February 2022
By Justin Bgoni
The Zimbabwe Stock Exchange has made great strides on its transformational journey since 2009, through demutualization, automation and product diversification. The evolution of the exchange from an open-outcry system to an automated trading system brought transparency and enhanced trade execution. Despite the key milestones achieved by the ZSE over the years, several people have been left out from benefiting through investing on the exchange.
Unfortunately, there is a myth that investing on the stock exchange is for the elite, leaving out several investors to also increase their worth through the exchange. To demystify such a myth, the ZSE embarked on a digital transformation journey in 2020 focusing on innovation, automation to facilitate ease of doing business for investors. The ZSE is raising awareness through several initiatives with a key message that Investing on the ZSE does present investment opportunities.
It is often said the best time to start was yesterday. The next best time is now. – Unknown. 2021 saw the ZSE reaching all-time highs, with the market capitalization hitting the trillion dollar mark in September 2021.
In 2021,the ZSE outperformed the rest of sub-Saharan stock exchanges on investment returns in percentage terms, achieving a first ranking. Zimbabwe (ZSE) topped the list of SADC exchanges in terms of dollar returns achieving 153,3 percent.
ZSE returns were ahead of inflation for the year 2021. The inflation closed the year at 60,7 percent whilst the All share index gained 310.51% in the year closing at 10 822.3649. The graph below shows a comparison of ZSE All share Index returns against the Consumer Price Index on a month by month basis in the year 2021. As indicated on the graph the returns on the All share index were ahead of the inflation curve for the greater part of the year.
The ZSE Turnover increased from ZWL$17.3 billion in 2020 to close at ZWL$65.2 billion in 2021 representing a 276.80 percent growth.
The market size of the ZSE grew by a significant 314.37 percent as indicated by the market capitalization which closed the year at $1.37 trillion compared to ZWL$317.88 billion in December 2020. Putting it into context, those investors that bought all the listed shares on the ZSE on 31 December 2020 would have paid ZWL $317.88 billion to own the shares. If the investors then decided to sell all the shares on 31 December 2021, the value they would pocketed is ZWL$1.37 trillion, achieving a profit of 314.37 percent. This therefore means that the investors would have managed to beat inflation by investing on the ZSE achieving a real return of 253.67 percent when comparing the All share index returns to inflation rate. Indeed investors can make money on the ZSE.
When it comes to investing, the process might seem daunting as some might not know where to start. In the words of Benjamin Franklin, “An investment in knowledge pays the best interest.” Knowledge plays a significant part in everything one does. When investing on the stock market, it can help one make better decisions or minimize losses. In the coming weeks the ZSE will be unpacking the Investment process, and demystify how one can also make money through investing on the ZSE.
If you would like us to focus on specific topics get in touch with us, email [email protected] with your requests. For any questions email us or interact with us on our Social media platforms @Zimbabwe Stock Exchange on Twitter, Facebook, Linkedin and Instagram.
Please note that past performance cannot be relied on as an indication of future performance. It is important for all prospective investors to carefully consider their financial situation and consult a financial advisor or stockbroker in order to understand the risks involved and ensure the suitability of their situation prior to making any investment decision.
For additional information about investment options; visit
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