ZSE loses more ground

HARARE - The Zimbabwe Stock Exchange (ZSE) maintained its downward trend as the market lost $10,2 million in the first week of April with market capitalisation closing the week at $2,65 billion from $2,66 billion recorded in the previous week, official data shows.

Figures from the Reserve Bank of Zimbabwe (RBZ) indicate that market turnover for the week also slumped 20,9 percent to $2,4 million from $3 million.

“This was on account of negative trading on the bourse…The volume of shares traded, however, increased by 97,41 percent to 24 537 860 shares in the same week,” the apex bank said.

During the week under review, the mainstream index recorded a decline of 0,38 points, to close the week under review at 98,18 points with the resources index remaining unchanged at 19,53 points.

“The industrial index was largely weighed down by losses in Hippo Valley Estates (25,55 percent), Dawn Properties (19,50 percent), Edgars (7,41 percent), National Foods (3,38 percent) and PPC (0,36 percent),” the RBZ said.

This comes as nearly $2 billion in shareholder value was lost on the local bourse year-on-year in the quarter to March compared to the same period last year as investors fret over the country’s policy inconsistency.

Market experts also say the under performance of ZSE continued to reflect waning confidence in the economy after total market capitalisation eased close to 45 percent annually, marking a persistent bearish run for 13 consecutive months.

Statistics from Lynton Edwards Stockbrokers (Les) show that the ZSE contracted by 14 percent to $2,6 billion in the three months to March 2016 from $3,1 billion in December last year.

In the three months, equities market traded lower in the first quarter to March 31, 2016, with the main industrials index losing 15,02 percent to 97,61 points, while the mining index was worse off, down 17,66 percent to 19,53 points.

A total 33 counters including Bindura closed the period in red while 15 were positive.

In the three months to March, beverages manufacturer Delta Corporation lost 20,21 percent of its stocks while British bank Barclays Plc subsidiary Barclays Bank Zimbabwe share prices went down 34,12 percent.

Other notable losses were recorded in diversified conglomerate Innscor Africa 37,48 percent, National Foods 19,90 percent, OK Zimbabwe 30 percent and SeedCo 23,58 percent.

Telecommunications giant Econet Wireless and insurance giant Old Mutual, however, closed the period on the upside with a gain of 15,84 percent and 8,28 percent respectively.

Les noted that the ZSE’s first quarter performance is to be expected given the economic fundamentals on the ground.

The country’s annual inflation for March shed 0,09 percentage points to  negative 2,31 percent from the February rate of negative 2,22 percent.

Annual inflation has remained in negative territory since October 2014.

Commodity prices especially for minerals have continued to retreat since early 2011 and the growth of the Zimbabwean economy will slow down significantly as a result.

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