Zimbabwe’s Stock Exchange (ZSE) performed well in U.S. Dollar terms compared to regional peers last year, according to the African Financials’ sub-Sahara Africa Top 30 Companies report.
According to the findings, regional stock markets – not taking into account South Africa – increased by 4.5% on average in USD terms last month.
This growth level is a considerable achievement, says the report, as it’s fuelled by robust earnings growth and overvalued stocks.
That said, they are down 11.6% on average to date. Zimbabwe’s Stock Exchange increased the fastest in December with a 43% rise, followed by Ghana with 31% and Seychelles with 18%.
Zimbabwe’s bourse has registered more gains than its peers over the past year, despite the headwinds such as strict regulations and elevated transaction costs.
In addition, the report features businesses from the region that hit $800 million capitalisation over the year, such as Australia Stock Exchange-listed platinum producer, Zimplats valued at $1,87 billion, Zimbabwe Mail reports.
“The key markets in sub-Saharan Africa that have done well include Nigeria and internationally listed stocks, which make up about 35% of the top 30 companies,” the report states.
“Additionally, the telecoms and technology sector has also seen growth with new listings, including companies such as UAC foods in Nigeria, UAC cement in Nigeria, Orange Code d’Ivoire, and African Oil.
“However, there are very few companies from South Central Africa, including Zimbabwe, Zambia, Malawi, Botswana, and Namibia, that have reached the critical level of market capitalisation of US$800 million,” the report adds.
However, the findings show that although there are firms in the regions trailing behind the $800 million capitalisation level, 2022 saw all-time high earnings growth.
“In the year to September 2022, sub-Saharan Africa’s markets, excluding South Africa, have performed relatively well compared to international markets. This is a significant achievement as it is driven by strong earnings growth,” states the report.