IN the face of weakening economic fundamentals in Zimbabwe, the Zimbabwe Stock Exchange (ZSE) has

proved a safe haven for investors with the ZSE All Share Index surging 1046% in 2020. This has been
carried over into 2021 as the local bourse sustained rallying momentum in the first week of February
along with global shares, as the ZSE All Share Index edged 11,43% to close at an all-time-high of 4012,47
points. In 2021 so far, the market is up by over 55%, thanks to the second best January performance in a
decade.

However, the past 24 months have seen no brand new listings of companies and an increase in the
number of delistings. The pressures of Covid-19, the contraction of the economy by 4,1% in 2020,
government interference with capital markets, high listing costs and a poor operating environment are
some of the reasons ZSE listed firms have sought delisting. Furthermore, local companies have been
pushed into amalgamations, unbundling and the pursuit of listings on alternative markets.

Last June, government suspended trading on the ZSE for five weeks, in a 2008 déjà vu which saw trading
being suspended for three months until February 2009. In 2020, the government blamed fungible stocks
PPC, Old Mutual and Seed Co International for capital flight and for steering the collapse of the
Zimbabwe dollar, thereby establishing a trend of government’s interference with capital markets and
dampening investor sentiment.

Subsequently, regional seed producer Seed Co International, delisted from the ZSE last October and
listed on the foreign currency denominated Victoria Falls Stock Exchange (VFEX) where it is the only
listed counter.

Johannesburg Stock Exchange listed firms PPC and Old Mutual were delisted from the ZSE upon the
resumption of trade, both have not yet shown any interest in pursuing a listing on the VFEX.

Commenting on government’s approach to capital markets, Old Mutual CEO Samuel Matsekete said in a
recent exclusive with Equity Axis: “We respect the decision by the authorities in barring fungibility…
however we also see that there would be need to give confidence to investors that we are open to them
investing and divesting conveniently and with ease. We hope that will be considered (by government)
going forward.”
Troubled gold miner, Falcon Gold (Falgold) in November 2020 exited the ZSE after the company
successfully applied for voluntary delisting. Falgold said it was no longer benefiting from trading on the
local bourse and had turned insolvent with no capacity to pay off its short-term debts, compounded
with perennial operating losses.

Powerspeed Electrical shareholders approved a proposition to delist from the local bourse on the basis
that it was no longer beneficial for the company. The Powerspeed board chairperson, Dr Simba Makoni
expressly indicated; there had not been much activity on the ZSE and that the listing had not attracted
any meaningful investment for the company in a while – hence the delisting move. A property concern
ZPI delisted in the last quarter of 2020 after its parent Zimre Holdings increased its shareholding in the
firm to 97,6% as the group sought to consolidate its operations, strengthen its balance sheet and
streamline operational costs in the face of weakening economic indicators.

Seed Co Limited is the latest to join the band of ZSE delisters effective March , 2021. Seed Co
International Limited (SCIL) shareholders approved resolutions to acquire the entire shares in Seed Co
Limited (SCL) as part of a reconsolidation transaction that translates to SCL becoming a subsidiary of
SCIL. This, as the groups seeks synchronisation of synergies and the purging of duplicated roles and
related costs.

Over the past decade, over 20 firms have delisted from the ZSE including: Gulliver, Interfin, Steelnet,
Trust Holdings, Lifestyle Holdings, Phoenix Consolidated, African Banking Corporation, Astra Holdings,
Tractive Power, Interfresh Holdings, PG Holdings, Apex, Cairns, Celsys and Chemco Holdings.

The onus is on government to remove its hand from the markets, create an investor friendly
environment which bolsters capital inflows, ensure policy consistency and lend an ear to the clamours of
the private sector.