The stock market retreated with investors putting on hold the injection of new money into the market while an investor flight became apparent after the indigenisation regulations were gazetted.Activity on the local bourse however improved during the last week of the month against the backdrop of news reports saying government was considering amending some provisions of its empowerment regulations. This was also strengthened by positive financial results coming from some of the listed companies.The industrial index opened at 140,37 points in March, while the mining index was at 175,08 points. The industrial index closed at 142,38 on March 31 while the mining index was at 216,85 points powered by Rio Tinto which gained US$1 from US$2,80 to US$3,80. The counter however shed US$0,80c on Wednesday.Investors had looked forward to company results giving direction to the market. “There have been mixed reactions to these results and a few surprises though and the market has witnessed some price adjustments on the bourse in light of the companies’ performances,” a report by Kingdom Stock Brokers said last week.Some analysts however said financial results did “very little” to trigger a bullish market.Shares worth US$39 million exchanged hands on the bourse in March as the ZSE recovered from investor jitters over the country’s indigenisation regulations.“The market turnover improved significantly in March with US$39 million exchanging hands compared with US$29 million the previous month,” Kingdom brokers said. “Value of trades improved in the last few days of the month despite having started the month at very low levels as the indigenisation regulations took effect.” ZSE chief executive Emmanuel Munyukwi said the announcement of the indigenisation regulations “dampened” activities on the market.“Since the regulations were gazetted we have seen a negative impact on trade. Last year our market was driven by foreigners, making up to about 45 -50% of the total turnover of about US$200 million on the ZSE,” said Munyukwi.“Companies in Zimbabwe need re-capitalisation because they do not have working capital and we were beginning to see a number of transactions where foreigners were coming in to rescue these companies. Whether these transactions will proceed we do not know because they were coming in to underwrite some of the transactions.” He said the market was beginning to attract investors such as Investec and Rand Merchant Bank. “Zimbabweans are net sellers at the moment because they do not have the capital. We are now on a six-month low from September last year attributable to uncertainty; people don’t know what is going to happen,” said Munyukwi.For the mining sector, it did not matter that commodity prices were going through the roof at the time because the reduction in mining production outweighed any gains.“We had been inundated with inquiries especially up to February. Hardly a week went past without entertaining foreign investors from South Africa, Europe and the United States. I am yet to see any since the regulations were gazetted,” he said.Paul Nyakazeya
