Omega Ukama 
THE Zimbabwe Stock Exchange remained relatively quiet in 2023 as regulations enacted in 2022 to discourage speculation continued to bite.
The All Share index closed Wednesday with year-to-date gains of about 800 percent compared to an upsurge of 4 500 percent in 2021.
With the bourse having registered gains of about 100 percent in 2022, the end of this year marks its longest “slump” since 2016, when bond notes were introduced.
While the market has continued to trend upwards, gains seen over the past two years were much less than what was seen on the bourse during the half-decade before the introduction of the measures, which included the banning of inter-account transfers between brokers and their clients.
Transfers from a client sub-account were also restricted to the customer’s bank account.
Justin-Bgoni
Withholding capital gains tax (CGT) on shares held for less than 270 days was raised from two percent to four percent, and the government later doubled down on this as it introduced a 40 percent CGT on securities sold on the exchange within 180 days of purchase.
There has also been a slump in listings on the exchange with a single REIT this year compared to four ETFs and a REIT in 2022.
Plain vanilla equity listings had already dried up on the local bourse, with several companies complaining that raising funds on the market was now difficult. A handful of companies have moved to the Victoria Falls Stock Exchange (VFEX) amid indications that many more could migrate to the US dollar-denominated exchange, which was introduced in 2020.
Foreigners’ activity on the ZSE continued to be skewed towards sales during the year.
Analysts say foreign investors have been frightened off the ZSE by “unsettling” policies as they take advantage of the Reserve Bank of Zimbabwe’s currency auction system to move their money out of the country.
“Without reforms, inter alia, respect for the rule of law, property rights, deregulation of FX controls, enforcing anti-corruption laws, foreigners will continue to shun the local bourse,” Imara Asset Management Zimbabwe’s chief investing officer, Shelton Sibanda, told a recent business conference.
“Rebuilding trust will take time and we should not expect much in the way of foreign investment for a while,” he said.
Amid the slowdown, Zimbabwe’s largest investment constituency, the insurance and pensions industry, began shying away from quoted equities. Listed stocks constituted 26 percent of pension funds’ aggregate assets at the end of June, down from 40 percent a year earlier.
On the other hand, investment property constituted 52 percent of the sector’s total assets, up from 38 percent.
“This indicates the industry’s investment preference of the asset class and the higher rate of increase in property values in line with inflation compared to other asset classes,” the Insurance and Pensions Commission said in a report.
Meanwhile, the VFEX’s All Share Index closed yesterday with a year-to-date loss of 33 percent.
“It is still a budding exchange and even though it is denominated in a stable currency, price discovery is still somewhat affected by the volatility in the broader economy and is still teething on that exchange,” a local equities analyst said.
“We should not read too much into these numbers at this point,” they added.
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