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THE value of trade on the Zimbabwe Stock Exchange (ZSE) declined by a third in January from the previous month as political uncertainty and the liquidity crunch took a toll on the market despite a slash in transactional costs.
Figures from ZSE show that turnover in January was at US$32 449 559 from US$$48 361 007.03 in December.
Foreign trade turnover was US$9 687 811 representing just under 30% of the total turnover.
The number of shares that exchanged hands was 741 283 938 nearly doubling the December figures of 399 266 785.
The dip in revenue comes at a time anticipation has been high that turnover would increase after Finance Minister, Tendai Biti slashed transactional costs on ZSE to 4.3% effective January.
This means that transactions costs in Zimbabwe are now comparable with those obtaining in the region.
A research analyst said there was an anticipated increase in turnover backed by a slash in costs but the situation on the ground paints a different picture.
“When charges were slashed we were expecting more volume but that has not happened,” he said.
He said the uncertainty on the political front has also scared away foreign investors.
The three parties to the Global Political Agreement — Zanu PF, MDC-T and MDC — are deadlocked over the resolution of outstanding issues.
Zanu PF has declared it will not make any concessions in the talks until the sanctions are lifted raising fears that the inclusive government formed last year is on the verge of collapse.
This means that foreign investors will sit on the fence until there is a clear picture on the direction the nation is taking.
The decline in activity on ZSE will be another blow for the 20 stockbrokers who derive their incomes from the increased volume of trade on the bourse.
Brokers are still smarting from the halving of commission on the trading of shares to one percent, a development likely to affect their incomes.
Already NDH Holdings disposed of their equities firm to a consortium of business executives.
Analysts say the dip in the turnover can also be attributed to liquidity constraints.
There is no money and the market is dominated by sellers and few buyers.
ZSE is one of the investment vehicles but with low disposable incomes among the country’s workforce it means that only a few can buy shares.
The minimum investment required by stock brokers ranges between US$300 - $500, a tall order for most of the working class who earn an average of US$200 a month.
BY NDAMU SANDU
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