ZSE remains depressed

HARARE - The Zimbabwe Stock Exchange (ZSE) remains subdued with the market’s turnover slumping by 70 percent to settle at $1,5 million in the week ending July 1, 2016,  the central bank has said.

A Reserve Bank of Zimbabwe (RBZ) update said most blue chip counters’ performance was depressed.

The RBZ also said the amount of shares traded also declined.

“In tandem, the volume of shares traded declined by 77 percent to 9 305 576 shares in the same week,” RBZ said.

But, the mainstream index gained by 3,77 points to close the week under review at 101, 17 points.

The mining index, however, declined marginally from 26,27 points in the previous week, to 24,70 points during the week under review.

“The industrial index was weighed up by increases in Rainbow Tourism Group (30,43 percent), Delta Corporation (13,03 percent), Padenga Holdings Limited (12,47 percent), British America Tobacco (1,67 percent) and Pretoria Portland Company (0,31 percent),” the central bank said.

This comes as the bourse contracted by 14 percent to $2,6 billion in the three months to March 2016 from $3,1 billion in December last year.

According to figures from brokers, Lynton Edwards Stockbrokers (Les), the 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.

Les noted that the ZSE’s first quarter performance was to be expected given the economic fundamentals on the ground, also hinting that the subdued performance was to prevail into the second quarter.

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.

Market experts also assert that alleged policy inconsistencies have resulted in investors and companies cutting back on spending on new projects and employment.

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