Zim bourse plunges to 6-year low

HARARE - The Zimbabwe Stock Exchange this week plunged to one if its lowest trades in six years with a paltry $53 576 worth of shares changing hands on Monday, as investors continue to shun the country’s “dying economy”.

This comes as in early January, daily turnover on the local bourse — with a market capitalisation of $4,2 billion — hit another low of $23 000.

Equities research firm EFE Securities said Monday’s turnover decline was a massive 95,18 percent from Friday level while volumes similarly dipped 95,81 percent to 440 million shares.

“Active stocks also declined from 15 last Friday to 10 today with two declining, one gaining and seven trading unchanged,” said EFE Securities in its trading update adding that “the low level of activity was largely attributable to supply constraints in the heavily traded stocks currently obtaining and subdued foreign participation”.

The latest development comes hard on the heels of Zimbabwe’s February 2015 annual inflation declining to 0,12 percentage points from January 2015 level of -1,28 percent to settle at -1,40 percent as a result of the fall in the year on year food and non-alcoholic beverages inflation prone to transitory shocks that was at -2,87 percent.

February month on month inflation was -0,07 percent and up 0,27 percent from January 2015 level of -0,34 percent.

Economic analysts said foreign investors, who dominate trades on the ZSE, are slowly losing confidence in the economy and are taking their funds to other attractive stock exchanges in Kenya and Tanzania.

“Stocks on the ZSE are no longer as attractive as they were in the past few years due to the declining economic situation in the country,” said an equities analyst with a local bank.


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