LIVINGSTONE MARUFU
The value of the Old Mutual Zimbabwe Stock Exchange (ZSE) Top 10 Index Exchange Traded Fund (ETF) retreated to ZWL$709,034,756.86 on Tuesday from ZWL$717 149 583.32 in November due to dry spell that has characterised the country, Business Times can report.
On the first day of trading, the ETF had a market capitalisation of ZWL$80.176m. It spiked 794% to ZWL$717 149 583.32 in November.
The ETF debuted at ZWL$1 per unit on January 4, 2021.
ZSE chief executive officer Justin Bgoni said the EFT will gain soon.
He said the introduction of the ETF to the market has resulted in increased participation, especially from retail investors.
Bgoni said with channels like ZSE Direct the retail investors have easy access to the stock market.
Bgoni said the proceeds from a sell order on ZSE Direct will now be credited to the investor’s wallet rather than being transferred to their bank account which drives participation of individuals on the bourse.
He said that service will attract a 2% administrative charge levied on the sale proceeds.
The proceeds of the ZSE Direct client will be credited to one’s ZSE Direct wallet on the same trading day after a successful matched and confirmed sell order.
The ETF offers exposure to ZSE Top 10 counters whose numbers in the last 314 days also hit historical high levels.
This gives an investor an opportunity to own 10 underlying stocks in one investment in the ETF.
Zimbabwe became the fifth country on the continent to trade the ETF after South Africa, Nigeria, Kenya and Egypt in trading the ETF.
The ETF, whose fund manager is Old Mutual Investment Group, is some form of a derivative because it derives its value from underlying assets.
ETFs can contain many types of investments, including stocks, commodities, bonds, or a mixture of investment types.
Old Mutual has said the investor will not have any additional tasks or costs over and above those associated with dealing in any other publicly traded security.
The fund manager will be responsible for periodically replicating the ZSE Top Ten index in line with the index ground rules.
He said the ZSE remains a viable option as the best preserver of value both against inflation and exchange rate losses.
