ZSE losses persist as top 10 indices decline 17 %

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By Alois Vinga

THE Zimbabwe Stock Exchange (ZSE) loss trajectory has persisted resulting in a decline in the all share and top 10 indices, 11 % and 16% respectively, the latest Reserve Bank of Zimbabwe (RBZ) monthly economic review has indicated.

The report, which covers the period ending August 2019, observes the losses are coming for the second consecutive month in what may be a hint on declining investor activity on the stock market.

“The ZSE registered losses for the second consecutive month in August 2019. Consequently, the All Share and top 10 indices fell by 11.09% and 15.87%, to close at 166.36 and 148.06 points, respectively,” reads the report in part.

Experts define indices as assumed portfolio of investment holdings which represents a segment of the financial market.

The calculation of the index value comes from the prices of the underlying holdings.

Some indices have values based on market-cap weighting, revenue-weighting, float-weighting, and fundamental-weighting.

Overall, the value of shares traded declined by 43 % to close at $109 million, during the month under review.

In terms of volumes, the shares traded fell by 28 %, to close at 118 million shares.

The industrial index declined by 11.34%, to close at 554 points in August 2019. On the contrary, the mining index gained 10.21%, to close at 269.55 points, during the same month.

“Subdued trading activity on the local bourse partly accounted for declines in both volume and value of shares traded,” reads the report.

On a year-on-year basis, the industrial and mining indices increased by 40 % and 67 %, to close at 395 and 161 points in August 2019, respectively.

ZSE market capitalisation declined by $2.89 billion during the month under review.

On a year-on-year, however, the local bourse market capitalisation increased by $9.27 billion to $12.48 billion in August 2019.

The trends emerge at a time when several listed firms are battling to secure foreign currency against a backdrop of a waning local currency whose value continues to depreciate against the US$.

Companies are also failing to import raw materials resulting in many predicting a tougher operating environment in the forthcoming year.