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Over $1 billion lost on the stock exchange

OVER $1 billion in shareholder value was lost on the Zimbabwe Stock Exchange (ZSE) in 2015 as the bourse took a battering from the harsh economic environment, latest statistics have shown.


Market capitalisation — the total value of the issued shares of a publicly traded company — fell by nearly 30% to $3 057 291 142 as at December 31 2015, from the $4 327 059 384 recorded during the same period in 2014.

stock exchange

This means that $1 269 768 242 in shareholder value was lost. The industrial index ended the year at 114,45 points down 29,69% from the same period last year. The mining index was down 66,95%, ending the year on 23,70 points.

Year 2015 was tough for the bourse, as evidenced by the low turnover throughout the period. Monthly 2015 turnover trailed the one recorded in 2014 except in February. In February, turnover was $34,78 million against $25,65 million recorded during the comparable period in 2014. November recorded the lowest monthly turnover of the year at $8,85 million — the lowest since March 2009.

Market watchers say the performance of ZSE mirrors the economy. In 2015, activity on ZSE was expected to be hectic following the introduction of the automated trading system (ATS). The system complemented the central security depository which went live in September 2014. The ATS is seen as the front-end of the trading cycle with the central security depository the back-end of the automated environment with a mandate for settlement of both scrip and cash.

In his 2016 national budget statement, Finance minister Patrick Chinamasa said “the on-going efforts by government to grow the economy, underpinned by positive sentiments arising from accelerated re-engagement with the international financial institutions”, augured well for the recovery of market activity at the ZSE from 2016.

Zimbabwe will this year clear the $1,8 billion debt to the International Monetary Fund, World Bank and the African Development in a development that is expected to unlock fresh capital.

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