Speaking at the inaugural summer school held by the ZSE, CEO Justin Bgoni mentioned some of the plans they have for the next few years and they are big according to reports by FinX. After the unquestionable success of the Old Mutual ZSE, Top 10 ETF investors can expect 2 new ETFs in the 1st quarter of 2022. The ZSE as a company also plans to list on the ZSE while other moves are expected to the West of Zimbabwe with the VFEX. The timing was a bit ominous given the events that have unfolded over the last week with the introduction of the ZSE CSD which seemed to have been the cause of some technical issues.

2 new ETFs

The most exciting piece of news was the introduction of two new ETFs to the market. They are expected to come in the first quarter of 2022. The excitement is warranted given that the first ETF on the market, the OMZSE Top Ten ETF, has brought early investors joy rewarding them with a 346.93% return as of 5th November 2021. When they launched the lone ETF Justin Bgoni reminded people of the days when Old Mutual introduced the first Unit Trusts in Zimbabwe and today we have 30 plus Unit Trusts. Well, it looks like ETFs are headed for the same trajectory. CBZ and Morgan & Co will step up to the plate and introduce ETFs to the market. We are still waiting for prospectuses but there are a few things we can glean from the information we were given.

CBZ Consumer-focused ETF

CBZ is a well-established name in Zimbabwe and by some measures the biggest bank and financial services provider in Zimbabwe. They are active in Unit Trust Fund management through Datvest. Having CBZ join the ETF party will be a great confidence boost to the young industry. The focus of their ETF as the name suggests will be consumer-focused companies. With the consumer Staples index up 463.48% and the consumer Discretionary index up 275.69%, those are certainly some returns investors would be happy to get their hands on. It will be interesting to see if they go for a straight index fund or they exercise their management muscle on this one.

Morgan and Co growth linked ETF

Morgan and Co is a fairly fresh name on the Zimbabwe investment scene being established in 2018. That said the company has built a strong reputation as a stockbroker and advisor. They also have an impressive track record of providing some of the best market intelligence available in Zimbabwe. It’s not easy to surmise what growth-linked means but we can look at the direction the ZSE showed in the early mart of the year to gain some idea. The part of the ZSE that has the greatest room for growth is in the Small-Cap and Medium-Cap index and we have seen this. So perhaps an ETF that bets on stocks with room for growth? I look forward to that.

VFEX expected to add Caledonia and Bindura in December

The Victoria falls Stock Exchange is counted amongst the strides that have been made in the Zimbabwean investment space. Things haven’t exactly gone smooth in the West of Zimbabwe. Only two companies have listed to date with the fungible counters Old Mutual and PPC seeming not to have heeded the call that was answered by SeedCo International. The good news is ZSE listed Bindura Nickel Corporation looks to make the switch to the West while Caledonia Mining Corporation looks to list on the VFEX by introduction, essentially a fresh listing. CBZ has already expressed switching to the VFEX.

ZSE to list on ZSE

Mr Bgoni also mentioned that the ZSE intends to list on the ZSE. This is not some abnormal Zimbabwean convention but a natural next step that should have followed after the demutualisation in 2016. This could go either way but a new listing on the ZSE will be welcomed.

Separation of VFEX and ZSE

The other issue Mr Bgoni touched on was the separation of the VFEX from the ZSE. They currently share a lot of resources and a CEO but clearly, the idea is to give each a life of their own.  Which makes sense. The VFEX has a lot of work to do if it wants to gain traction. So far it has been marked by very little activity.

It certainly looks like we can expect a lot of thunder close to Victoria Falls. Meanwhile, the listing of the 2 new ETFs and the ZSE will bring a lot of excitement to the ZSE. 2022 could be a huge year.