New year, new changes on the Zimbabwe Stock Exchange

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The Zimbabwe Stock Exchange (ZSE) ushers in the new year with some recent changes that investors should know.

Traders on the ZSE now have an extra hour to buy and sell shares.

“The Zimbabwe Stock Exchange Limited wishes to advise the public that it will be increasing its trading hours with effect from 1 January 2022.” The exchange announced.

The market will now close at 1300hrs giving investors an extra hour from the previous 1200hrs close.

Zimbabwe Stock Exchange Trading costs – sell side

The cost of selling shares has also gone up by 0.5% or 1.5%. This depends on how long you have held your shares.

Investors selling shares on the ZSE will surrender 1.5% of proceeds to the taxman through the new capital gains tax if they held shares for more than six months. Those who sell shares before the six months period will pay 2% in capital gains tax.

The Zimbabwe Stock Exchange was the best performing African Exchange in 2021, returning 310%. The returns have beat official inflation, which closed the year around 60%.

However, the local currency has been on the backfoot against the US Dollar. The country’s controlled currency auction system has resulted in everlasting shortages of the much-wanted greenback. The banking system in Zimbabwe collapsed a few years ago, and locals face many challenges while transacting with the rest of the world. This has condemned them to the backseat as the world progresses in trade and integration. Savings rates, too, have been affected by the lack of a reliable financial system. Zimbabwe’s financial system is primarily affected by policy inconsistencies from the authorities. And lowest savings rates result in further investment decline, which retards economic growth.

New ETF listing on the ZSE

Meanwhile, a new Exchange Traded Fund (ETF) will be listed today. Investors can start buying the new Morgan & Co multi-sector ETF. This will, however, be an ‘actively’ managed ETF according to the issuing company.

The ETF will not necessarily track an index as it is actively managed. The issuer said, “Since this is an actively managed fund, the weights and counters will inevitably be changed over time.”

Through this ETF, investors on the Zimbabwe Stock Exchange can access shares in banks, real estate, insurance, and reinsurance companies. The fund will “invest primarily in banks, real estate related firms, insurance and reinsurance companies, industrial and non-industrial companies, and financial holdings companies,” as read from part of the statement by the issuer, Morgan & Co.

This will be a second ETF listed on the ZSE after the Old Mutual Zimbabwe Stock Exchange Top Ten Index ETF was listed in January 2021.