ZSE losing streak continues

HARARE - The Zimbabwe Stock Exchange (ZSE)’s losing streak continued in February with the local bourse’s market capitalisation falling down 3,7 percent to $3,8 billion.

Equities research firm, IH Securities, said while foreign investors continued shunning the bourse, the industrial index had also taken a 3,5 percent knock to close at 140,24 weighed down by losses in beverages manufacturer Delta Corporation, cigarette maker British America Tobacco and diversified conglomerate  Innscor.

“The mining index rose 0,28 percent to 56,47 buoyed by gains in Falcon Gold, up 66,67 percent and RioZim, up 1,40 percent, offsetting losses in Bindura Nickel of 1,71 percent,” IH said.

Other notable gains during February were recorded in Proplastics which was up 19,05 percent, financial services group ZB Financial Holdings up 15,11 percent, Nampak which firmed 11,57 percent and cement maker PPC up 7,14 percent.

“Significant losses were seen in Econet, down 17,01 percent, National Tyre Service down 12,17 percent, Barclays down 10,71 percent Edgars down 10,42 percent,” the equities firm said.

Turnover rose 28,23 percent to $10,9 million, with average trades of $548 400 realised during the month.

The most significant contributions to total value traded were Delta, CFI and Econet contributing 39 percent, 13 percent and seven percent respectively.

Total volume traded went up 58,83 percent to 40,6 million shares.

This comes as another equities firm, Lynton Edwards Stockbrokers (Les), recently said overseas investors are not expected to troop back into the country any time soon despite Zimbabwe’s stocks being one of the cheapest in Africa.

“Having gained as much as 25,8 percent in 2016, the Zimbabwean equity market still appears cheaper than most frontier markets,” Les said in an investor alert published recently.

This comes as the Zimbabwe Stock Exchange (ZSE) is currently trades at a trailing price earnings ratio of 9,45x compared to MSCI’s frontier markets and MSCI emerging market equivalent of 13,73x and 14,95x respectively.

Meanwhile, IH pointed out that the country’s economy remained under pressure in February.

“…with companies struggling to access foreign exchange to source inputs in the market specifically foreign portfolio holders still facing continued delays in repatriation of proceeds (both dividend and share sales),” said IH.

Following Econet shareholders vote in favour of a proposed rights offer, allowing the company to raise $130 million to repay offshore debt, IH said other companies were going to follow suite.

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