ZSE profit slides 50pc on challenging environment
The Zimbabwe Stock Exchange Limited’s profit for the year to December 31 went down 50 percent to $3,2 million compared to $4,8 million recorded in the prior year on challenging business environment.
At $5,1 million, total comprehensive income for the year was 3 percent below the previous year’s $5,2 million.
Revenue for the period was 44 percent above prior year to close at $25,9 million from $17,9 million.
Total income generated during the year under review was 90 percent firmer to close at $34,4 million compared to $18 million recorded in 2018.
ZSE exercised prudential cost management during the year in order to contain the effects of the escalating prices of goods and services due to high inflation.
The year closed with annual inflation at 521 percent, while the newly re-introduced local currency declassified by 85 percent.
During the year under review, staff costs and other operating costs were on the upside due to the inflationary environment.
Resultantly, total expenses more than doubled to $22,2 million from $10,1 million in the previous year.
Total assets decreased to $23,5 million from $25,3 million.
ZSE chairperson Caroline Sandura acknowledged the challenging operating environment that obtained during the year under review.
“The 2019 performance was achieved under great economic uncertainty both at global and local level.
“According to the Reserve Bank of Zimbabwe (RBZ) the country’s economy contracted by an estimated 6,5 percent in 2019 weighed down by exogenous shocks in the form of the El-Nino induced drought and the destruction caused by Cyclone Idai,” she said in a performance review statement in the recently published annual report for 2019.
“The ensuing year had a number of changes in the operating environment including the abandonment of the multi-currency regime and adoption of the vesting period for dual listed firms,” she said.
During the year under review, the ZSE revised listing rules to incorporate enhanced disclosure requirements for listed companies as well as sustainability reporting.
ZSE had no new listings in 2019 but had de-listings which are PG Industries, Willdale Preference Shares and GetBucks Medium Term Notes.
By close of the year, six counters were under suspension and namely Cottco, CFI, Border, Hwange, Falgold and Hippo.
Hippo’s suspension was lifted this year and resumed trading.
The ZSE also facilitated GetBucks Microfinance Bank’s rights issue and Padenga’s acquisition of a 50 percent stake in gold operations — Dallaglio Investments.
In terms of trading performance, the primary indicator — All Share Index was 57 percent higher as 57 of the 59 counters closed the year in the positive.
A significant turnover of $2 billion was recorded during the year with the market’s top ten capitalised stocks accounting for 80 percent of that. Financial services giant, Old Mutual was the most liquid stock.