ZSE expands, reclassifies indices

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The Zimbabwe Stock Exchange (ZSE) will next year introduce new indices on the local bourse following its adoption of the Global Industry Classification Standards (GICS).

ZSE chief executive Justin Bgoni said the new indices are expected to provide the market with better tools for performance measurement as well as assist in sector-based investment strategies.

In line with this, all listed counters will be reclassified into financials, consumer discretionary, consumer staples, materials, industrials information communication and technology as well as real estate.

According to the ZSE, as a result of the reclassification, new indices will be introduced with effect from January 1, 2020 and these are the All Share Index, ZSE Top 10, ZSE Top 15, ZSE Top 25, Small Cap Index(41-61), Medium Cap Index (11-40), Top 10 Investable Index, ZSE Export and Dual Listed Index and Sector indices comprising of ZSE Financials Index, ZSE Consumer Discretionary Index, ZSE Consumers Staples Index, ZSE Industrials Index, ZSE Information, Communication, Technology and Transport Index, ZSE Materials Index and ZSE Real Estate Index.

“The current Industrial Index will be discontinued and redefined according to GICS while the Top 10 Investable Index will account for free float adjustment,” said Mr Bgoni in a notice to stakeholders.

“The new indices are expected to provide the market with better tools for performance measurement as well as assist in sector-based investment strategies.

“As an example, a fund manager will be able to create a portfolio that focuses on investing in export and dual listed stocks and offer such portfolio as a unit trust to potential investors,” he said.

According to the reclassifications, CBZ Holdings, FBC Holdings, First Capital Bank, Fidelity, First Mutual Life, GetBucks, NMB, Old Mutual, ZB Financial Holdings and Zimre will now fall under the Financials Index.

The Consumer Discretionary Index will account for African Sun, Axia, Edgars, Innscor, NTS, Padenga, Powerspeed, Rainbow Tourism Group, Simbisa and Truworths.

Consumer Staples Index will have counters such as Afdis, Ariston, BAT Zimbabwe, CFI Holdings, Dairibord, Delta, Hippo, Meikles, MedTech, Natfoods, OK, Star Africa and TSL Holdings.

The Materials Index will account for fifteen counters that is ART Corporation, Bindura, Border, Cottco, Falgold, Hwange, Lafarge, NamPak, PPC, Proplastics, RioZim, Turnall, Seed Co, Seed Co International and Willdale.

Cafca, General Beltings, Masimba, Zeco and Zimplow will make up the Industrials Index while the Information Communication and Technology will have Cassava, Econet, Unifreight and Zimpapers.

The Real Estate Index will have Dawn, First Mutual Properties, Mashonaland Holdings and Zimre Property Investments.

Meanwhile, the local bourse is also engaging critical stakeholders in the development of a Green and Social Bond framework as it continues to broaden capital market offerings.

Capital markets investments typically cover a wide range of products, but in Zimbabwe the local capital market is not well developed and is dominated by equity shares.

Regulator, Securities and Exchange Commission of Zimbabwe (SECZ) has been working on the development of a wide range of investment products such as real estate investment trusts (REITS) and derivatives and just last week a statutory instrument to that effect was gazetted.–heral.co.zw

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