According to Kingdom Stockbrokers (KSB) existence of high yielding business opportunities on the market was enabling financial institutions to borrow expensive money to finance the identified high-yielding investment opportunities.
“Investment rates for 30 days that attracted average rates of around 15% during the last quarter of 2009 are now being quoted at between 20-25% whilst the 90 day area is being indicated at rates above 25%,” said KSB
The wholesale market comprises of institutional investors like pension funds, insurance companies, corporates, banks and high net worth individuals with high liquidity to spare. The equities market continued to experience mixed trading this week as investors continued to critically study fundamentals of stocks that they are interested in as recent developments on the equities market testify the consequences of imprudent investment decisions.
“Expert technical analysis of stocks is also highly rewarding given the volatility that continues to characterise the Zimbabwe Stock Exchange. The reduction of transaction costs on the ZSE to 3,21% from their current 7,5%, to be effected soon, offers an incentive to investors as they would be able to switch from those counters that they would perceive to be overvalued, going for those they believe to be undervalued at a reasonable cost,” Zimbabwe Allied Banking Group stock brokers said
Going forward the bulk of trade on the stock exchange is expected to be driven by portfolio restructuring activity that may see the market coming off a little as the prices of most counters rebalance.
Long-term investors are expected to seize this opportunity to take positions in their portfolio picks.