THE Zimbabwe Stock Exchange Holdings Limited (ZSEHL) will list on its bourse on July 9 as it seeks to modernise its corporate structure and governance.
ZSEHL directors in September last year approved the listing of the entire issued share capital of the bourse’s holding company by way of an introduction on the ZSE main board.
The scheme of reconstruction of ZSE Limited (ZSE) was then approved by shareholders at an extraordinary general meeting held on October 8, 2024.
This scheme involved transferring ZSE’s shares and those of the Victoria Falls Stock Exchange (VFEX) to ZSEHL to become subsidiaries of the holding firm.
After that, the listing of the ZSEHL was approved by the Securities and Exchange Commission of Zimbabwe on June 9 this year.
In a pre-listing statement, the holding company said the listing would “enhance access to capital markets; unlock shareholder value; strengthen brand visibility for ZSE and VFEX and improve corporate governance and transparency through public reporting obligations”.
Typically, exchanges globally often generate revenue from listing fees, trading commissions and market data services.
However, in Zimbabwe’s challenging economic climate, where trading activity has been hampered by currency volatility, capital controls and shifting investor sentiment, these traditional income streams may not be growing fast enough to fund future ambitions or maintain competitiveness.
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Revenue for ZSEHL was down last year at ZiG142,29 million, from the prior year’s ZiG147,58 million.
For ZSEHL, the drop in revenue and a 29% rise in operating expenses contributed to a 98,13% drop in profit after tax to ZiG1,05 million in 2024 from the prior year.
Consequently, ZSEHL’s liquidity position registered a decline, with ZSEHL having ZiG1,59 to every ZiG of short-term debt last year, down from the prior year’s ZiG1,98.
The drop indicates that the company has a smaller buffer of liquid resources available to cover short-term obligations.
Though still solvent, this trend suggests some pressure on near-term liquidity, which management will need to monitor to ensure ongoing financial flexibility.
By listing ZSEHL on its platform, the bourse can open a new avenue for capital raising and shareholder investment, providing flexibility to fund technology upgrades, product expansion and other operational needs.
“ZSE Limited is a licensed securities exchange providing an avenue for capital raising anchored on a multi-asset class trading platform. ZSE Limited offers a broad range of products and services comprising equities, exchange-traded funds, depository receipts, real estate investment trusts, fixed-income securities, data and training services, geared towards addressing investors’ needs,” ZSEHL said.
“Further, ZSE provides securities clearing and settlement services through the ZSE Central Securities Depository. Dating back to 1894, the ZSE has evolved to be one of the longest-established capital-raising platforms in Africa.”
It noted that listing the holding company would allow the VFEX and the ZSE to continue operating independently as wholly owned subsidiaries of the ZSE Holdings.
“The purpose of ZSE Holdings, therefore, is to be a holding company in respect of various investment entities, which include the ZSE and the VFEX,” ZSEHL said.
ZSEHL’s top five shareholders are the government, with a 32% stake, FBC Securities (Private) Limited (10,26%), IH Securities (Pvt) Limited (8,79%), Legat, John Richard (3,73%) and Tunmer, Mark John Steele (2,26%).
