STOCKS at the ZSE rose in the first two days of trade this week buoyed by hopes that listed companies will be spared from the Indigenisation Act; a proposed investment policy announced last week; and improved financial results expected on the market soon.
Investment minister Tapiwa Mashakada is expected to test the market with the policy he is working on.“A number of foreign investors pulled out their investments reflecting depressed investor sentiment over perceived financial risks, especially following the gazetting of the Indigenisation Regulations in March,” said an analyst with an investment bank on Tuesday. “In particular, foreign investors’ contribution to market turnover fell from between 40-50% to an average 20% per month. With listed companies being spared from the regulation investment on the market could improve.”
The broader market has not been struggling for direction since inflation declined slightly to 5,4% in June from 6% the previous month. The industrial index opened the week firmer at 125,59 points following a 0,23 points (0,18%) increase. Old Mutual and PPC both rose five cents to trade at 145 cents and 335 cents as Econet added a cent to 476 cents.
Powerspeed strengthened by 0,40 cents to close at a cent and Turnal advanced 0,24 cents to trade at 2,74 cents. Three counters traded in the negative territory as Edgars retreated a cent to four cents, Pearl shed 0,10 cents to 1,80 cents and African Sun lost 0,05 cents to close at 2,75 cents. The mining index went up 2.00 points (1,48%) to close at 136,75 points due to Hwange which added 0,99 cents to 21 cents whilst Bindura, Falgold and RioZim were unchanged at previous trading day’s levels respectively.
On Tuesday the industrial index’s winning streak continued with a 1,17 points (0,93%) increase at 126,76 points amid widespread gains. Econet and Hippo added four cents each to close at 480 cents and 80 cents as ABCH went up two cents to 19 cents. Delta rose 0,99 cents to trade at 47 cents and Afdis advanced 0,50 cents to close at 14,50 cents.
The gains were partially offset by losses in Aico Africa which lost 0,51 cents to trade at 15,99 cent and Dairibord which shed 0,30 cents to close at 7,50 cents. CFI retreated 0,09 cents to close at 15,41 cents whilst FBCH was 0,05 cents lower at 2,40 cents. The mining index was flat at 136,75 points as Bindura, Falgold, Hwange and RioZim were unchanged at 10 cents, three cents, 21 cents and 230 cents respectively.
Finance minister Tendai Biti gave a good summary of the ZSE’s woes in his 2010 Mid-Term Fiscal Policy Review to parliament. “Trading on the Zimbabwe Stock Exchange has largely been low, mainly due to market lack of liquidity in the first half of the year,” he said. “Foreign participation has remained subdued with investments mainly confined to portfolio restructurings. Corporate results have also failed to uplift the equity market as most corporate are still undercapitalised and also suffering from subdued demand.”
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The industrial index which started the year at a high of 156,52 had dropped to 127,46 by June 2010, whilst the mining index fell from an opening of 209,8 to 143,08. Similarly, market capitalisation fell from US$3,97 billion in January 2010 to US$3,19 billion by end of June 2010. On Friday last week the industrial index had rallied 0,40 points (0,32%) to end at 125,36 points.
The mining index was flat at 134,75 points as Bindura, Falgold, Hwange and RioZim were unchanged at 10 cents, three cents, 20,01 cents and 230 cents respectively. — Staff writer.
