Zim stocks depressed in H1

HARARE – The Zimbabwe Stock Exchange (ZSE) was depressed in the first half of 2014, with the benchmark industrial index retreating 7.7 percent to 186.56 points in June from 200 points in January.

According to stockbroking firm Lynton-Edwards, the leading individual contributor to the 63-member bourse’s turnover during the half year was beverages maker Delta Corporation, which received $66.7 million of the total funds invested on the exchange.

Cottco was the biggest loser, tumbling 86.67 percent.

The mining sector was the leading contributor to 2014 year-to-date performance followed by dual listed stocks.

The insurance sector was the worst performer.

Imara Edwards executive director Tino Kambasha said the market “saw some profit taking from the good run in 2013 but as we entered the year with policies still unclear and consistent, we saw investors moving to the sidelines”.

“This then brought about the dreaded “L” word, liquidity crunch. With little demand the market was destined to head one way,” he said.

Investment on the stock market has been heavily affected by policy inconsistencies and demand has been low.

However, analysts have projected that the second half could improve on the back of increased investor appetite, if policies such as indigenisation – compelling foreigners to cede 51 percent shareholding to locals – are clarified.

“We have welcomed comments from both ministers Patrick Chinamasa (Finance minister) and Francis Nhema (Indigenisation minister) to review policies and we await the new measures. We feel investors are very keen on Zimbabwe and as soon as we highlight what the rules are and we all speak with one voice, then we should see a very swift change in demand on the ZSE,” Kambasha said.

“The short to medium term is purely based on how quickly we can announce new policies and how sincere we are in implementing them,” he said, adding that “the ZSE should continue trading sideways in the short term, in the absence of any significant interest on either the buy or sell side,” said Imara in a Twitter update.

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