ZSE 'dry spell' to persist

HARARE - The Zimbabwe Stock Exchange is unlikely to have any new listings while depressed trade will persist in the next 18 months due to continued economic deterioration, a recent report has said.

In a first half study of the economy released last week, economic research firm Econometer Capital Global (Econometer) said prospects for delisting are high, and is evidence of how Zimbabwe’s capital markets are “becoming shallower contrary to what was the case a decade ago”.

“No new listings are expected in the next 18 months with an average of two counters expected to delist on the corresponding period,” Econometer said.

This comes as the country’s economy is faltering, with 2014 economic growth targets revised downwards to 3,1 percent from government’s initial 6,1 percent projection.

The southern African nation — still suffering a hangover from a decade-long economic recession — faces a widening trade deficit, high unemployment levels, unprecedented company closures, a huge debt overhang, dwindling revenues, deflation, depressed aggregate demand and an acute liquidity crisis, amid concerns of further deterioration.

Firms listed on the local bourse, which last had an Initial Public Offering in 2007, have been struggling to survive in a
dollarised economy — introduced in 2009 — characterised by an acute liquidity crisis, limited lines of credit and stiff competition from cheap imports among other things.

Last year, a total 11 companies delisted as they failed to raise money on the market and to attract new investors to inject fresh capital, among other challenges.

A significant number of the delisted firms failed to meet the minimum listing requirements.

Industrial counters, Apex Corporation, Cairns Holdings, Celsys, Chemco Holdings, Interfresh, Gulliver, Interfin, Lifestyle Holdings, Phoenix Consolidated, Steelnet and financial services firm, Trust Holdings left the bourse last year.

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