DEMAND for shares of heavyweights and mid-cap counters on the Zimbabwe Stock Exchange has increased over the last month as foreign investors take positions in expectation of an economic recovery, market watchers and analysts have said.
Stockbrokers and market watchers who spoke to The Source last Wednesday said foreign investors have in the past three weeks renewed their interest in companies with strong shareholder support, effective management and viable business models despite a general slowdown in the economy.
This is despite most quoted companies releasing financials results that have been largely reflective of the subdued economic activity.
“Locally, the earnings reporting season is underway with company results aptly reflecting weakness in economic activity,” MMC Capital said in its weekly equities report.
“Technically, however, the scenario of more buyers relative to sellers, chiefly in counters dear to foreign investors, will likely result in the market posting gains until the buy orders are filled.”
Turnover on the local bourse was up 163 percent to $66,3 million on the prior month despite slower increase in volumes suggesting that demand for some stocks may be higher as some investors continue to hold on the shares.
“Order books for most stockbrokers have reflected an appetite for Delta, Econet, Innscor and other mid-cap counters since mid-August. Foreign investors seem to be taking positions,” said an investment analyst for a local stockbroker.
Official data show that the weight of the top 10 counters (excluding Old Mutual) on the bourse – as a percentage of the total market cap – remained relatively flat at 76 percent this week but is seen advancing on renewed interest on the market.Advertisement