ZSE loses nearly $80m in 2015

HARARE - The Zimbabwe Stock Exchange (ZSE) has lost $72,5 million in the first two weeks of this year as stock prices continue to plummet.

Statistics from the local bourse show that market capitalisation declined to $4 323 178 821 on Friday from $4 395 719 222 registered at the beginning of this year.

The equities market took a knock soon after the July 2013 harmonised elections and since then has struggled to find traction. The slower economic growth projected for 2015 and the disappointing 2012 and 2013 earnings have contributed to weakening stock prices across the board.

Market experts say the equities market has also been affected by delistings and suspensions which peaked in 2014 as companies faced mounting viability challenges.

However, despite the loss on market capitalisation, ZSE’s benchmark industrial index traded in the positive for a fifth consecutive day after gaining 0,64 percent to close at 166,15 points on Friday.

Cement maker PPC surged 30 cents to close at 200 cents while diversified group Innscor added three cents to trade at 60 cents.

The largest counter by market capitalisation Delta increased by a cent to 110 cents, while Old Mutual was up 0.50 cents to settle at 242.50 cents.

On the downside, cement producer Lafarge eased 10 cents to trade at 45 cents, while Econet lost 0,50 cents to 58,50 cents and Masimba was down 0,20 cents to close at 1,80 cents.

The week on week industrial index added 3,45 points or 2,12 percent making a positive run on the stock market.

However, the mining index retreated 1,53 percent to settle at 57,24 points.

Nickel producer Bindura slipped 0,10 cents to 4,90 cents whilst Hwange was marginally up 0,01 cents to close at 4,01 cents.  Falgold and RioZim were unchanged at 3 cents and 15 respectively.

On a week on week basis, the mining index lost 10,01 percent.

Meanwhile, market watchers have predicted more delistings on the local stock exchange (ZSE) this year on the back of slackening economic growth and depressed financial performance.

A record 12 companies have departed from the local bourse over the past five years.

Several listed entities are voluntarily leaving the ZSE, saying they are not realising value while others are saying new investors are increasing their individual shareholding beyond the bourse’s prescribed threshold.

According to ZSE’s listing rules, an entity that acquires more than 35 percent of a listed company is required to buy out minority shareholders at the current trading price and subsequently delist from the bourse or reduce shareholding to prescribed level.

A recent report by equities research firm Lynton Edwards Stockbrokers (Les) revealed that the recently published financial results of the Zimbabwe Stock Exchange-listed companies reflect a deteriorating economy, characterised by a prevailing liquidity crunch, which has severely affected disposable incomes.

Comments (2)

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CARTRIDGE GALLERY - 20 January 2015

It makes my heart bleed to see such a beautiful and potentially great nation disintergrate. We need leaders with the people of Zimbabwe at heart.

Seth - 22 January 2015

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