Stockbroking Industry Under Pressure as Trading Sl...

Stockbroking Industry Under Pressure as Trading Slumps on ZSE and VFEX

Oscar J Jeke- Zim Now Reporter

Zimbabwe’s stockbroking sector faced a turbulent final quarter in 2024, with declining activity on the Zimbabwe Stock Exchange and the Victoria Falls Stock Exchange pushing half of the country’s licensed firms into operating losses.

According to data from the Securities and Exchange Commission of Zimbabwe, 11 out of 22 registered firms recorded operating losses in Q4—an alarming jump from just two firms in the previous quarter.

“The industry’s earnings were rated as Critical based on the ratio of operating costs to brokerage income,” SECZIM noted in its quarterly update, highlighting the growing pressure on brokerages as revenues falter.

Stockbrokers earn commissions tied to trading volumes, and the subdued market activity directly impacted earnings.

Despite the downturn, a few firms maintained dominance. On the ZSE, Morgan & Co led with a 17.71% market share, narrowly ahead of Imara Edwards Securities at 17.45%. IH Securities followed with 14.36%, while Bethel Securities captured 12.52%.

On the VFEX, IH Securities stood out, commanding 68.10% of trades. Lynton Edwards Securities trailed with 10.99%, followed by Imara Edwards at 6.45%. Morgan & Co ranked fifth with 3.33%.

The sharp decline in trading has raised concerns about the viability of smaller brokerages. Firms like Viscapig Markets and Remo Securities posted minimal or no market share, underscoring an increasingly uneven playing field.