ZSE recovery continues

HARARE - The Zimbabwe Stock Exchange (ZSE) recovery continued last week with the bourse’s market capitalisation rising 5,8 percent to close the week at $3,03 billion.

Data from the bourse shows that at the close of business on Friday last week, the industrial index was 6,56 percent higher than prior week at 105,79 points as the mining index remained flat at 20,16 points.

The positive performance was in spite of the fact that the market lost two counters from its roaster — Pelhams Limited (Pelhams) and Radar Holdings Limited (Radar) — which had been posting successive losses before being delisted at the close of the week.

Trading in heavyweights during the week under review were beverages manufacturer Delta Corporation (Delta) and cigarette maker British America Tobacco which recorded gains of  17,79 percent and 8,82 percent respectively while mobile network operator Econet Wireless Zimbabwe recorded a loss of  1,96 percent.

Volumes traded totalled 70,87 million shares and averaged 14,17 million shares per day.

The bourse’s weekly turnover stood at $5,86 million as an average daily value traded of $1,17 million was noted for the week.

The week’s largest gainers were Delta, Pro Plastics and diversified group Art Corporation with gains of 17,79 percent, 17,02 percent and 16,67 percent respectively.

Losses at the close of last week were by the now-delisted brick maker Radar which was down 19,50 percent as property firm ZPI also slumped 8,42 percent with sweetness eluding sugar company Hippo which shed 6,38 percent.

The ZSE has been steadily recuperating after recording its first successive positive trades week last week Thursday.

This recovery is in light of a steady downward trend the bourse had recorded after losing $10,2 million in the first week of April and its failure to record a single positive week since the year started.

ZSE started recording its rebounds the week before April 21, after gaining 0,30 percent to close the first positive day at a total market capitalisation of $2,285 billion as the industrial index was driven by a 1,17 percent gain in Delta at 98,65.

The central bank recently attributed improvements on the bourse to positive sentiments characterising the month, as President Robert Mugabe clarified the country’s controversial black empowerment laws.

But, local research firm Zimbabwe Economic Policy and Research Unit (Zeparu), expects the recovery to be short-lived as it anticipates activity on the bourse will continue on a downward trajectory due to diminishing investor confidence and tight liquidity.

“In 2016 activities on the ZSE are expected to continue on a downward trend coupled with low investor confidence, declining economic fortunes worsened by the El Nino effect which will result in one of the most severe droughts since 1992,” the firm has said.

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.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.