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Stock market closes 0.29 percent down
06/01/2014 00:00:00
by Business Reporter
 
 
RELATED STORIES

ACTIVITY on the Zimbabwe Stock Exchange (ZSE) was bearish Monday trade with turnover reaching US$741,000 at the close of trade.

Foreign participation is expected to revive the stock exchange by the end of the month as the market also adjusts to the contents and implementation of the 2014 National Budget.

At close on Monday, the Industrials Index was down 0,29 percent to 200.45 after losses in heavyweight counters OK Zimbabwe, Old Mutual and Hippo. The minings Index lost 3,73 percent as a result to 44,08.

Milk processor Dairibord, which is one of the recovery stocks for the year, added 0,1c to 15,1c.

There were gains in Natfoods, which gained 10c or 5 percent to 210c and Econet, which put on a marginal 0.1c to 60.1c. NTS, which recently released results which showed a small profit was 0,1c up to 2,6c and FML was 0,2c ahead to 8,2c.

TSL was sellers only at 40c after reports the group had disbursed US$17 million to contract farmers for the tobacco season, a figure 13 percent higher than last season's. Delta was unchanged at 138c as was CBZ was 15c.

Last year foreigners dominated trading on the ZSE this year, with foreign buys accounting for over US$20 million, while sales totalled over US$13 million.

Foreign participation is expected to dominate equities trading on the stock market going forward given the eventual prospects of high and sustainable growth in the local economy and listed counters in a US dollar environment.

A bull market characterised much of the local bourses trading last year, with a bear market only persistent before and after the July harmonised elections as foreign investor adopted a wait and see attitude as to which policy government would adopt.

After the departure of the multitude of rent seekers that inhabited the market about five years ago, the ZSE now resembles a real stock market with adequate balance between long term investors and short term speculators.

Analysts say the risks on the stock market were real and have to be managed. They say it was important to have a system and investment strategy that was easy to follow.

On Monday OK Zimbabwe was 1c lower to 19c, Old Mutual was down 10c to 240c with a market cap of US$132,42 million and Hippo, which is expected to get its indigenisation compliance certficate this year shed a marginal 0,02c to 90c.



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The other two fallers of the day came from the mining sector. Bindura was 0.1c lower to 1.9c while Fagold led the fallers losing 1c or 20 percent to 4c.

Meanwhile the ZSE last had an IPO in 2007 when Zeco Holdings listed.

Apart from a series of unbundlings that saw Dawn Properties, Red Star Limited, Zimbabwe Property Investments and Pearl Properties Limited being listed in the last ten years, new listings have been as rare as snow in this part of the world.

Analysts say a combination of bad policies such as indigenisation and empowerment laws have not played in favour of the bourse.


 
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