ZSE market capitalisation declines further

HARARE - The Zimbabwe Stock Exchange (ZSE) market capitalisation fell by 9,38 percent month-on-month in November to close the month at $3,26 billion, as the country’s economic crisis continues to worsen.

Statistics released by an equities research firm on its monthly ZSE review, IH Securities, revealed that the local stock exchange maintained a downward trend, falling yet again for the ninth consecutive month in November.

“Activity remained depressed in November as turnover dropped by 35,42 percent to $8,32 million, while average daily trades for the month came in at $396 140,” the research firm said.

Econet, new listing Simbisa and Delta made the biggest contribution to total value traded, contributing 21 percent, 14 percent and 12 percent respectively.

Total volume traded rose by 49,54 percent to 95,38 million shares.

In the period under review, the industrial index fell 10,15 percent month-on-month on weakness in heavyweights as Innscor, Econet, SeedCo and Delta fell 43,76 percent, 32,71 percent, 11,22 percent and 9,91 percent respectively.

The mining index eased 5,26 percent on the back of a 13,33 percent loss in RioZim.

IH Securities noted that earnings released in November continued to reflect the challenging economic environment with falling global commodity prices impacting counters like Hippo and Bindura and low consumer spend where OK Zimbabwe and Delta both registered a drop in revenues.

“The 2016 budget statement, presented in the month, continues to reflect a vulnerable external position with a growing current account deficit, though thawing in international relations saw foreign direct investment registering a 25 percent growth,” the equities company said.

“The 2016 growth forecasted at 2,7 percent is expected to come from the mining, tourism, construction and financial sectors.

“However, we believe the growth forecast is optimistic given the continued strengthening of the United States dollar against neighbouring currencies impacting Zimbabwe’s competitiveness, international commodity prices set to remain weak in 2016 and the anticipated impact of the El-Nino on the agriculture sector,” IH Securities said.

November also saw the listing of QSR business Simbisa Brands Limited, which was unbundled from Innscor Africa Limited as well as the suspension of Pelhams from trading on the ZSE.

The month’s top gainers were Ariston, up 104,35 percent, Zeco, up 100 percent,  Rainbow Tourism Group, up 48,15 percent, Pelhams, up 33,33 percent and Masimba, up 31,31 percent.

“Other significant losses for the month were recorded in Zimpapers, down 37,50 percent, OK Zimbabwe, down 20 percent and Star Africa, down 20 percent,” the firm said.

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