Your guide to investing on the Zimbabwe Stock Exchange: Here’s what you need to know


By Brian Tawanda Manyathi


My discussion here is on the arguments for, and against trading on the Zimbabwe Stock Exchange, people centered measures we all may need to take in favour of seeing more trade on our local capital markets, and a share of links of related articles.

Long term lending financial markets are not touched on in this article, though they require similar attention, given that most of the bank lending is still on a short to medium scale since the adoption of the multiple currency use in 2009, and the end of the hyperinflationary period:


Favourable arguments angle for investing or trading on the ZSE


1. Electronic trading

 ZSE is now conducting electronic trade, this is a plus, coming ZSE’s way, as some trade on Africa’s other stock exchanges may still be paper based at the time of writing this article. 

2. Potential pre and post-election status quo

 There is a general consensus that with the nearing national elections in Zimbabwe the capital market may perform poorly. However, post national elections, no matter the result in terms of whichever political party wins, the stock exchange is expected to perform well towards the second half or year end of 2018.

Therefore, even though risky, buying securities now will be far much cheaper and one may find they would have made a bargain purchase. In spite of our economic challenges, the advice to buy low, buy now, is not misplaced. It can easily create huge profits for even any little informed investors, that is, those investors only informed to the extent of what the investment manager knows.

Basically, there is so much bubbling potential right now. Buying now, is potentially most profitable because these shares are highly likely underpriced. In finance, they use the security market line and capital market line, to see which counters are underpriced, correctly priced, and overpriced shares (stocks).

This could be the benefit of your use of qualified investment managers and financial analysts at companies or stockbrokers such as Imara, or FBC securities, etc.

3. Pro investing advice

 Financial advisers share that you should buy low, but must analyze your researches. If share prices go up your research will determine whether to hold or go for a kill, never selling at a loss.

 My advice also is, study the listed company’s, (the counter’s) performance over time, it can tell you the best bet for your money, and instruct the investment manager accordingly.

Investment managers or financial analysts are at best chartists. They track a share’s market performance, trend line, like you do come up with a time series.

Equity shares on their own follow a random walk, swings are not easy to predict anywhere in the world.

Questions often asked are “do our economic conditions promote long term stock purchases?” and “what does one look at when buying stock?”.

Answers lie in the reasons why we generally buy shares/stocks. You may say, you intend to invest on stock exchange mainly for capital gains in the medium term and for consistent cash flows in the long run in form of dividends.

The reasons for investing vary with each investor e.g precautionary, liquidity, or very long term. We also are either risk averse, or risk takers or risk neutral. Each set of investor therefore, has unique advice.

In general, eg buy Econet’s shares only after studying the trend line of their share price, e,g for a period in excess of ten years.

What this makes you is a risk averse investor, hence preference of long time horizon checks to come to a purchase decision. You need to have an interest in the targeted companies.

Financial advisors share that you should research everything. Old Mutual, Econet, Innscor Delta and Masimba Holdings are good stocks and they give good dividends.

However, if say we have our own Spotify in Zimbabwe, with no rich trade history, but with a concept that sells like a hot cake, well there is no historical charting there to do. But if gut feeling tells the whole thing is not another industry fad, you go ahead and invest.

Spotify is a European company that does live music streaming and has had wildfire like growth, your taking ages in face of potential investment into shares of such companies, can only make you a late comer with the least profit (capital gain) when you finally decide you want to invest.

4. What the risk takers are looking for

Risk takers scout for the likes of Spotify, on the ZSE, and may hardly invest in Econet or Old Mutual.

Another way, used by the risk neutral investor is to diversify. A bit of shares in the long trusted counters and a bit more in the irresistible fresh new concept counters. Or buying a bit of shares in the volatile industry firms e.g construction (say Masimba formerly Murray n Roberts) and a few shares in the stable industry firms e.g retail (say Pick n Pay).

Buying your shares, where you have money spared for that, should not be a problem.

The issues to do with low household incomes often enquired on, may in my view affect you only if you intend to buy and sell quickly, but not if you are buying for the long horizon, which may turn out to be a lot more liquid and with a changed course as regards the household incomes as our economic fortunes improve.

However I advise, you approach these investment managers and financial analysts with a financial mind, e.g my likes, or my equivalent on making investments into your huge, long horizon shares.

That way, they will just not tell you the stock is underpriced, without giving you ample proof that you test also, and agree to or not.

5. Read into the external auditors audit opinion paragraph

Another question often asked is, “Can one make informed decision from a company financial statements or not in terms of investing?”

My answer is yes, indeed. They are perhaps your start point. Then consider all other factors non-financial.For listed firms all are audited financial statements by independent firms, global audit firms. But be sure to read into the external auditors audit opinion paragraph and any additional paragraphs if the opinion is modified.

Investors should analyze financial statements of counters they wish to invest in. Financial analysis is done through traditional ratios, for profitability, liquidity, efficiency, gearing and investors’.

The ratios are best compared with results of other similar companies, local and international, and previous years’. We also now have financial ratios for predicting impending failure commonly known as Z-Scores. Still on the financial analysis, I should advise you to read the notes to financial statements keenly.

Again where your understanding of IFRS interpretation is not very good, call on my likes, or my equivalent, before you conclude you have understood those notes, for well established firms they are pretty long yet, pregnant with information that makes you decide no or yes to invest.

Zimbabwe has adopted all the International Financial Reporting Standards through the Institute of Chartered Accountants of Zimbabwe (ICAZ), or the Practising Auditors and Accountants Board (PAAB).

So less worry on financial statements of listed firms on the ZSE, they are highly likely than not, up to scratch, given the issue we directed one another to above, that they are statutorily audited annually.

Where is your money going as an investor on a ZSE listed firm, read onto that firm`s future growth plans/projects, if notes do not mention these, if outside industry journals do not mention these, if press does not get the wind of these, book and go to ask direct from the companies’ business development offices/desks, as that’s where the future dividend, yours, will emanate from.

6. Financial analyses

Away from financial analyses, also look at non-financial indicators, most companies now have these due to the use of the *balanced scorecard*. Find your target firm’s balanced scorecard, if not anywhere in their annual financial statements, go to their headquarters and ask for that, for e.g five years running.

If they lack that, begin to doubt if you can leave them with your hard earned money in their shares. Another impending failure model that is non-financial is the Argenti`s factor scoring tool which companies` corporate finance departments use. See if that also can be provided.

Once you have successfully invested, kindly do not be a passive investor, be active as does Nick Van Hog at Hanwange or Rainbow Towers. Even institutional investors like, pension funds, are nowadays called to be very active.

How, by attending AGMs and EGMs as part shareowners, if absent, at least send a proxy, fill in that proxy form in advance well in time after receiving notices of meeting, and advise/resend to the corporate secretariat offices that each of these listed firms have.

Investors who diversify, buy a few shares here and there, are prone to passivism, there has to be away to keep self well informed with what is happening with each listed firm where your shares are, some of the things you know early are what will inform you to decide to hold, sell or buy.

Annual reports sent to your private boxes or electronic mail also you must read, they have the chairperson’s report, the director’s report, corporate governance statements as signed, the components of financial statements namely statement of profit or loss and other comprehensive income, statement of changes in equity, statement of financial position, statement of cash flows, and noted to financial statements and more of which are important support offices for your listed firm, its bankers, lawyers etc.

Most who moved to the diaspora but bought shares long ago, are having these sent to their postal boxes, and going for years unread. When you have invested kindly do not let it be so. Want to invest in shares, all these things come attached, that is where your money is.


Unfavourable arguments against investing or trading on the ZSE

1. Insider dealing

 A lot of insider trading and profiteering indeed must be happening, main reason being that our stock exchange is like most in Africa weak form efficient. That alone allows profiteering through insider trading, to begin with.

That Zimbabwe’s stock market is weak form efficient is borrowed from theory and is very true for us, and most markets in Africa. What it means is our share prices will take too much time to reflect on their price, the information to do with the company or counter concerned.

That creates opportunity to profit most for very well informed investors, much more for those with insider knowledge, insider trading, and still more for those who have investment managers or can take their time to study carefully trends.

However, financial advisers share that it should be noted that the ZSE listing requirements prohibit insider trading.

The board of directors and management of a listed entity are not allowed to trade during closed periods. In addition companies should comply with disclosure requirements to avoid both insider trading and market abuse.

2. Speculative arbitraging

 Another economic adviser shares that, arbitrage opportunities exist from the thinking that for instance, at some stage the OML share hit $14 on ZSE. If you were heavily in debt in Zimbabwe you just bought on JSE with 35 rand and offload at $14 in Zim and clear off your bankers.

The shares are fungible. Looks like, a simple killing. But it just needs to time very carefully. The changing prices, commission, fees and the 💱 currency exchange rate.

Other economic advisers however, argue that if indebted where would you get the money to buy on JSE? And that, this is exactly what is called speculation which in the past has contributed heavily in killing our economy

3. Currency of trade

 Other economic commentators argue that our money economic market in general, is very volatile, it is very difficult to trade, the best thing is let the chaos continue until after the national election in 2018.

They bolster their argument from a view that there are people with money locked up in the local surrogate currency of bond notes and that they are the ones experimenting with the ZSE.

Such commentators offer the option of buying property instead in bond notes or getting a mortgage now. Other financial advisers, even if they think ZSE is undervalued and add ZSE on their list of global stock exchanges you should trade on; still share cautioning sentiments that we should remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest on the ZSE.

Therefore, if you are unsure of the suitability of your investment you should seek financial advice. Tax rules can change and the value of any benefits depends on specific circumstances.

 People centered measures we all may need to take in favour of seeing more trade on our capital markets. 

4. Internet content, and work with search engines

 I share that we need to have content experts as a nation, who spend their time on the internet correcting the notion that tells our correct story on ZSE performance. If we sleep on correcting the ZSE story on the internet, then our efforts to bring investors to the exchange will be cutthroat as they first Google search often. For instance the figure below shows this.

Volunteerism (Volunteering is chiefly needed) from competent and qualified Zimbabweans in telling our true economic story and positive policy effect on the internet and social media, more positive content, definitely allows e.g Google searching, willing and able foreign investors to get half the story told, when we all are in charge and responsible on what is told of us and our landscape.

This calls for working with all search engines we may know outside Google, the likes of Bing, Yahoo,, etc. We should also target World Financial reports such as

The Doing Business in Zimbabwe 2018 World Bank Group Flagship report makes no mention of our Zimbabwe Stock Exchange’s performance, such important reports we should have a dedicated people as as nation that quickly raise a hand to have more on our key economic pillars included. Such reports are the first investors will access about Zimbabwe on the net.

5. Other views on key economic pillars such as the ZSE

 Other socio-economic commentators share the view that the economic reportage scenario in Developing countries (Low income nations) still serves international interests, more than countries that host those Stock Exchanges. Usually, the local people in the country side own no shares or direct economic linkages/ definition/identification with Stock Exchanges hosted in their economic space.

To them this is why benefits earned from Stock Exchanges never directly benefit Africans/ Zimbabweans. They further the argument by stating that the major reasons why Africans/Zimbabweans remain underprivileged and disadvantaged in economic participation and benefiting is the absence of organized government operational directive/focus/policy that addresses the absence of citizens’ participation in each of the countries where an African Stock Exchange is hosted.

Also the majority of Africans are not literate as in being ‘business literate as well as ICTs literate’. Therefore, even if told the benefits of electronisation of a stock exchange they still may struggle to figure out how it impacts directly or indirectly on them.

For instance, mobile money use while highly beneficial, you still have cries for increased use of paper money and thriving black markets.

The African countries live under some State Capture Scenario, as all are battling minerals externalization and corruption by former govt employees and multinational business syndicates.

6. Primary Value Chains

Most if not all government structures lack internal pillars of 21st century business activities in their structures. To this they add the view that, the pillars of business activities are Knowledge Management structures, Value Management structures and Quality Management structures.

And also that the Stock Exchange business happens in the Secondary Value Chains and Tertiary value Chains while Africans still Operate at Primary Value Chain levels.

Therefore, Government Planning must elevate the Primary Operation LEVEL of Indigenous citizens into participation and benefiting from higher Value Chains. Besides, the literacy levels in Zimbabwe/Africa are not Industrialisation Specific and Significant which is what must be the reigning argument for revision of school educational curriculums so that this knowledge catches the young and growing minds early.

Doing this answers questions such as “How then can I participate in arenas of Practices when I am locked by Colonially inherited institutions and Economic models?”

Another financial adviser contributed the following questions we all can also ask in addition:

  1. What is the principle of Operation of every Stock exchange and Systems?
  2. What is the Stock Exchange’s EASE OF LISTING and doing business by race relation factors?
  3. What portfolios and Share types exist in competing companies on a particular Stock Exchange? eg Preferential Shares, Debentures, Equities or others.
  4. How many companies offer their employees common Shares?
  5. How risky is investing in a country / Stock Exchange per type of shares?
  6. What constitute a fallback / backup arrangement or fund institution behind a stock Exchange’s products? Insurance and Banking institutions


Related articles


Brian Tawanda Manyati is a qualified Chartered Secretary and Administrator and a Certified Accounting Technician, IFRS Expert & Content Reviewer who writes and makes, entrepreneurial, business, socio-economic and political analyses from a business and economic angle in his own personal capacity. He is contactable on +263772815211 or, and on Facebook.


Comment on this article: Call/text/whatsapp: (+27) 834767918


Facebook: Zimbabwe Digital News