Following a dramatic improvement in foreign currency revenues, an increasing number of listed companies on the Zimbabwe Stock Exchange (ZSE) are rewarding their shareholders with US dollar dividends in an effort to boost shareholder confidence.
Since de-dollarization, most listed companies have not been able to pay dividend in US dollars as they traded in local currency.
However, several firms in their 2021 financial results statements have been reporting improved foreign currency earnings from local sales following government consent for them to charge goods in both local and foreign currencies in 2020.
In the past 12 months, there has been a significant shift in the economy towards dollarization as the local currency lost its value.
In recent weeks, several listed companies have since declared part of dividend payouts to shareholders in foreign currency with the rest settled in local currency.
In June, Delta Corporation declared a US$0.6 cents final dividend on top of a payout in local currency as more than half of the group revenue for the period was in foreign currency.
“The Board declared a final dividend of US$ 0,6 cents and ZW$ 120 cents per share to be paid on 17 June 2022, in line with the multi-currency framework,” said Sternford Moyo, the chairman for Delta Corp.
An associate company, African Distillers (Afdis) which is controlled by Delta and hotelier African Sun are some of the companies that have declared dividends in hard currency.
Giant retailer, OK Zimbabwe Limited also announced a USD payout to shareholders this month.
“The Directors have declared a final dividend of 36.5 ZWL cents and 0.13 US cents per share,” said OK Zimbabwe.
The local currency has significantly lost value since its reintroduction three years ago despite shareholder value being restored by positive performance on the stock market in the past two years.
However, this year has not been rewarding for investors on ZSE following several policy interventions by authorities to restrict gains as government accused the stock market of being actively used as conduit to undermine the value of the local currency.
This has weighed heavily on market sentiment and led to the dampening of activity in recent months.
Analysts have described the development as positive for the local stock market as this will ensure shareholders get real value for their money.
There has been lack of interest particularly from foreign investors to trade on the local bourse in recent years owing to challenges in repatriation of earnings as the country faces serious foreign currency shortages.
