ZSE turnover recedes

HARARE - The Zimbabwe Stock Exchange (ZSE)’s turnover closed the month of October at $37,9 million down from the year-to-date peak of $65 million registered in June.

The equities market’s turnover opened the year at $55,7 million, but closed the first quarter ended March 2012 down to $32 million, according to statistics from the ZSE.

Foreign investor participation remained depressed on the bourse with the value of shares foreign bought closing October at $23,7 million compared to $23,3 million in January while the number of shares bought by the foreign investors slumped to 27,4 million during the month under review from 158 million in January.

The bourse’s market capitalisation, however, closed at $4 billion in October up from $3,5 billion in January.

The key industrial index closed at 154,47 points in October up from 138,52 points in January while the resources index advanced to 93,66 from 79,09 in the same periods.

Last week Wednesday, the market’s turnover went up 391 percent to $3,757 million, its highest daily turnover since the beginning of November.

Total transaction value jumped to $3,757 million on 6,310 million shares from $764 727 on 17,10 million shares that traded the previous day.

The bourse said; “Significant deals were recorded in Delta where 1 663 million shares worth $1 579 million traded while over 300 000 Econet shares worth $1 539 million transacted during the session.”

Meanwhile, the ZSE remains depressed. Since January, it has failed to attract new listings with only one initial public offer by TN Bank being floated.

The market has been dealt a major blow by the prevailing liquidity crisis, while the indigenisation law has dampened foreign investor participation.

Foreign investors are the major players on the market.

The indigenisation law requires all foreign-owned firms to cede at least 51 percent to black locals.

In his 2013 National Budget, Finance minister Tendai Biti said during the first two quarters of 2012, trading on the bourse was generally depressed, but picked up during the third quarter.

He said the industrial index, which started the year at 138,52 points, peaked to 146 points in September 2012.

“Similarly, the mining index, which opened the year at 79,09 points, marginally improved to 96,0 points in September,” Biti said.

He said the subdued trading on the bourse was also reflected through market capitalisation, which had been averaging $3,4 billion between January and September 2012.

The Treasury chief said government remained committed in ensuring that trades and settlements on the securities market are automated.

“… The Central Securities Depository (CSD) company has been established, comprising 51 percent ownership by government-related entities and Chengetedzai with 49 percent.

“The company is in the process of identifying a CSD system vendor. It is expected that the CSD system will be operational by the first quarter of 2013.”

Biti added that the amendments to the Securities Act will increase the Securities Commission of Zimbabwe’s effectiveness to protect investors.

The Act is being amended to bring it in line with developments that have taken place in the securities sector since promulgation in 2004. - Eric Chiriga, Business & Online Editor

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