Copyright thezimbabwemail
THE planned delisting of National Tyre Services (NTS) from the Zimbabwe Stock Exchange (ZSE) has led to renewed calls for the bourse and regulators to address some of the challenges facing listed companies. Analysts believe there is need to improve liquidity, reduce listing costs and enhance the regulatory environment. They also contend that, as the local economy continues to evolve, it is crucial for the ZSE to remain as a competitive and attractive platform for companies and investors. This year, the ZSE witnessed the delisting of Old Mutual’s Top Ten Exchange Traded Funds (January), Khayah Cement Limited (April) and Truworths (July). NTS, which is now seeking shareholder approval to delist, said it was concerned with the sustained low liquidity on the ZSE, which undermined effective price discovery and limited shareholders’ ability to realise value or exit their investment positions. The company said it continues to incur significant listing-related costs, including statutory audit fees, publication costs and regulatory compliance expenses that have become disproportionate to the benefits derived from maintaining a public listing. Many positives Senior equities analyst Ms Vanessa Machingauta said the country’s markets remain dynamic, with notable corporate actions having taken place during the year, including counters migrating between the two bourses (Zimbabwe Stock Exchange and Victoria Falls Stock Exchange), new listings and, in some cases such as NTS, delisting. “While the delisting of NTS may point to a smaller universe on the ZSE, there are still a variety of investment options available, with notable performances during the year such as Starafrica Corporation, which grew by 57 percent in real terms, GB Holdings up 52 percent and ZHL with an increase of 48 percent. In this regard, one delisting does not necessarily dampen investor sentiment in the capital markets, as there continue to be many positives and opportunities emerging within the market,” she said. She also said the ZSE’s listing rules and investor-protection architecture were aligned to its peers. Differences are, however, in terms of market depth and breadth, in some instances. Ms Machingauta indicated that price support and overall liquidity on the ZSE were closely linked to the broader liquidity conditions in the economy. “This trend highlights the sensitivity of the equities market to macroeconomic liquidity cycles, where tighter monetary conditions tend to constrain trading volumes and dampen short-term investor participation,” she said. Financial analyst Mr Malone Gwadu said the delisting of NTS reflects the persistent challenges the local bourse has been facing. “It is a reflection of the economy, where there is very limited liquidity due to the tight monetary policy stance taken by the central bank in order to rein in inflation and exchange rate vulnerabilities,” he said. During its delisting, Khaya Cement said it faced difficulties submitting timely financial reports and covering listing fees, among other challenges. Investment analyst Mr Enock Rukarwa said the delisting of NTS invites questions around the net benefits of maintaining a listing, especially on the ZSE. “But we cannot really say that the cost of maintaining a listing in Zimbabwe is heavy, especially for business organisations, but probably what is heavy there is the regulatory requirements that are associated with listings,” he said. “For companies which are not necessarily big-cap counters but probably mid-tier to small-tier caps, the regulatory requirements — given the operating conditions within the Zimbabwe capital market space — to some extent require that level of flexibility, which probably cannot be provided by the framework and also the structure of the regulatory requirements.” Mr Rukarwa, however, said the ZSE fairly compares to other regional exchanges in terms of listing requirements, trading activity and investor protection. “The bulk of the ZSE listing requirements of 2019 were borrowed from the listing requirements of the Johannesburg Stock Exchange (JSE). Even in terms of the stockbroker requirements, the qualifications and competences for one to be eligible to trade as a dealer or a stockbroker, the qualification is the same as the South African qualification. “So, the Zimbabwean capital market regulatory framework, insofar as listing compares to other regional markets, has some sort of convergence in terms of the requirements thereof, especially when you look at the Johannesburg Stock Exchange and other stock exchanges,” he said. The ZSE, he said, is one of the best-performing stock exchanges, especially in the SADC region and also in Africa. Trading activity has been concentrated in very few big counters, such as Delta and Econet. In its third-quarter 2025 equity strategy report, stockbroking and equities research firm IH Securities said the ZSE performance will continue to be largely decoupled from fundamentals and instead mirror liquidity cycles in the market. However, in an interview earlier in July, ZSE chief executive officer Mr Justin Bgoni said the performance of the bourse is now linked to improved fundamentals largely as a result of currency and price stability. “If you look at how the market has performed, the currency is stable, which means that currency is no longer an issue; therefore, people are no longer coming to our market just to hedge,” he said. Mr Bgoni said he has always maintained that when a currency is stable, everything becomes normal. Since the country adopted Zimbabwe Gold (ZiG) in April 2024, the currency has achieved relative stability. – Herald
