ZSE in subdued trade

HARARE - The Zimbabwe Stock Exchange (ZSE)’s benchmark industrial index shed 0,14 percent yesterday to close at the week at 190,71 points.

While the mining index remained unchanged at 33, 61 points, among the gainers were agriculture concern Ariston advancing 7,69 percent to 0,7 cents and clothes retailer Edgars which went up 2,08 percent to close at 12,5 cents.

Banking group CBZ was marginally up by 0,07 percent to settle at 15,11 cents whilst Old Mutual advanced 0,01 cents to close at 242,51 cents.

Losers included Medtech, down 20 percent to close at 0,04 cents, Barclays 2,44 percent lower to four cents and Delta retreated to 124,9 cents from 125 cents, a 0,08 percent fall.

The value of trades on Friday fell to just over $600 000.

This comes as the local bourse has failed to find direction in the new year with market experts pointing to economic challenges and the acute liquidity crisis prevalent in the country.

On Thursday the benchmark industrial index added 0,68 percent to 190,97 points in the first session after the tobacco auction floors opened for trading on Wednesday.

The cash crop is expected to improve liquidity in the cash strapped economy while spontaneously stimulating aggregate demand. A produce of 185 million kgs valued at $680 million is projected in the current year ahead of 166 million kgs valued at $612 million achieved in the prior year.

Industry experts contend that the cash flows generated from same are however not expected to address the cash gap in the economy which threatens to reverse the economic gains achieved so far.

Meanwhile, Imara Edwards Securities says foreign investors trading on the local bourse may be selling rather than buying, but they are not part of the scramble out of emerging markets seen in some other parts of the world.

“They are only moving to the sidelines for a breather rather than heading for the exit points for good,” said Zimbabwe’s largest stockbroker and securities firm.

This comes after the share price at Delta — Zimbabwe’s biggest brewer — fell 17 percent in the month. Shares in the Innscor food conglomerate were down by six percent.

However, shares in Econet Wireless, the telecommunications firm withstood the trend and retreated only marginally.

“This isn’t a stampede out of a risky emerging market. It’s more likely to be a tactical move to the side-lines by astute investors who are positioned to buy into market dips as opportunities arise later in the quarter,” said Tino Kambasha, an executive director at Imara.

He also highlighted out that valuations had firmed considerably in the second half of 2013 — up by 10,6 percent — with foreigners eager to buy into the up-trend.

Nonetheless, corporate earnings have been disappointing. Volumes at Delta had fallen 25 percent in the third quarter of 2013.
 

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