Tuesday, July 2, 2013

Zimbabwe Stockexchange rallies

ABOUT 67 million shares valued at US$6,3 million were traded on the Zimbabwe Stock Exchange on Friday last week, representing a staggering 2 343 percent recovery in sales.
The increase in the value of shares traded on the ZSE last Friday represented a 781 percent increase compared to Thursday. However, the recovery in both volumes and value of shares could not stop the main industrial index sliding southward. The main index was 0,6 percent weaker on Friday at 211,2 points after losses in Barclays, which fell 20 percent to US4,5c as Old Mutual shed 7 percent to US214c, Delta slid 2,1 percent to US140c, Meikles softened 1,6 percent to US31,5c and CBZ shed 0,7 percent to US13,5c.
However, the ZSE mining index was unchanged at 73,3 points as Falgold, Bindura, RioZim and Hwange failed to trade as investors shied away the from resource firms' shares. The top five gainers were led by Zimplow, which added 9 percent to US5,5c, ZHL gained 7,7 percent to US1,4c, Afdis rose 3,1 percent to US33c, Econet surged 3,1 percent to US66c while PPC moved 2 percent to US250c.
FBC led the top five value leaders after US$5,1 million of its shares changed hands while US$400 320 Econet shares were bought followed by Mashhold at US$343 874, CBZ at US$106 432 and Natfoods which had US$43 810 worth of shares sold.
Pioneer (US8c) leads the value gainers year to date at 700 percent followed by GB Holdings (US0,5c) and Willdale (US0,25c) both gaining 400 percent and Masimba (US12c) and Trust (US0,8c), which gained by 300 percent. Trading on the ZSE continues to be dominated by cash rich foreign investors due to the liquidity challenges pervading the entire domestic markets, which constraints local investors.
The country showed significant potential for recovery growth after dollarisation and adoption of the short-term recovery policies, but started showing signs of slow down in 2011, which forced Government cut growth forecasts. However, the factors arresting the country's potential for growth have been lack of affordable capital to fund companies' working capital and capital expenditure needs.
Where capital is available it is invariably short-term and prohibitively expensive. Most companies that borrowed at dollarisation in 2009 have ended with huge interest burdens now suffocating progress towards achieving profitability. However, expectations are that after the harmonised elections expected at the end of this month and the new Government comes into office, investors who have been sitting on the fence will come to decide to act and invest on the ZSE and various other sectors.
Zimbabwe has innumerable investment opportunities, broadly, in such sectors as mining, agriculture, tourism and manufacturing while lucrative opportunities also exist in specific sub-sectors of infrastructure, financial services, ICT, pharmaceuticals, agro-business, value addition and retail.

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