The Zimbabwe Stock Exchange’s turnover for the second quarter to June 30, 2025, grew by 45 percent to US$52,08 million from US$35,80 million in the previous quarter, buoyed by activity in Econet and investor hedging.
Generally, growth in stock market turnover implies increased trading activity, greater liquidity, and heightened investor interest in the market or specific stocks, making it easier to buy or sell shares at a stable price.
This comes when Zimbabwe has seen growing market stability since introducing its new currency, ZiG, in April last year, to replace the inflation weary Zimbabwe dollar, meaning growth in market turnover represents significant real returns for investors.
According to the Securities and Exchange Commission of Zimbabwe (SecZim) capital market newsletter for the second quarter, the ZSE turnover received a major lift from a block deal in Econet shares worth US$9 million in May 2025, complemented by increased appetite from hedge-seeking buyers.
However, total market capitalisation for the quarter under review shrank by 3,37 percent from US$3,65 billion in the first quarter of 2025 to close at US$3,3 billion in the review period.
The ZSE and its subsidiary, the Victoria Falls Stock Exchange (VFEX), offer various financial instruments for hedging, including equities, Exchange Traded Funds (ETFs), fixed income securities, and contracts for differences (CFDs).
Investors can use these instruments to hedge against risks like foreign exchange fluctuations and inflation by taking positions that offset potential losses.
Specifically, the ZSE offers index-based instruments that allow for exposure to broad asset classes and leverage, including the ability to short-sell an indexed instrument to profit from declining markets, which helps hedge existing portfolios.
According to the SecZim newsletter, the VFEX All Share Index registered a quarterly drop of 2,82 percent from 110,32 points as of March 31, 2025, to close at 107,21 points on June 30, 2025.
The ZSE All Share index also came off 3,91 percent during the quarter to close at 197,23 points as of June 30, 2025.
“During Q2, the quarter, the VFEX turnover retreated by 75 percent to US$14,83 million. “Market activity during the quarter registered a decline due to profit taking and the absence of negotiated trades on the VFEX,” reads part of the newsletter.
In terms of securities market intermediaries’ performance, funds under management (FUM) of investment managers for the quarter under review declined 11,44 percent to ZiG82,68 billion from ZiG93,35 billion in the previous quarter.
During the period under review, total FUM included US dollar-denominated FUM of US $2,31 billion, which was translated to local currency at the prevailing exchange rate as of 30 June 2025.
“US dollar-denominated FUM accounted for 72,74 percent of total FUM, with the remaining 27.26 percent denominated in the local currency.
“ZiG-denominated FUM declined by 40,97 percent to ZiG22,54 billion, from ZiG38,18 billion reported in the previous quarter, whereas the USD-denominated FUM increased by 8,28 percent in the same period under review from US$2,06 billion to US$2,31 billion,” reads part of the report.
According to the SecZim newsletter, in the period under review, there was a slight increase in the sector’s exposure to the stock market, rising from 29,36 percent in the previous quarter to 31,71 percent as of June 30, 2025.
The proportion of FUM invested in property declined from 48,45 percent to 40,91 percent, and money market investments increased from 8,85 percent in March 2025 to 10,30 percent by 30 June 2025.
The sector’s investment in unquoted equities rose from 4,50 percent recorded in March 2025 to 5,56 percent in June 2025, while exposure to bonds grew from 6,62 percent to 8,56 percent over the same period.
Cash, call deposits, and other investments collectively accounted for the remaining 2,95 percent of the total investment exposures in the asset management industry.
“There was a slight increase in the sector’s exposure to the stock market, rising from 29,36 percent in the previous quarter to 31,71 percent as at 30 June 2025.”
