The Sunday Mail
STOCKBROKERS have been spending not more than 20 minutes conducting trade on the Zimbabwe Stock Exchange (ZSE) in the past four weeks as investor apathy sets in owing to poor economic and corporate performance.
The market’s worst session in the month came on November 4 when trading was completed in less than 16 minutes, with only six counters of the 62 tradable shares active, statistics from the ZSE show.
Turnover on the day stood at US$564 000.
However, turnover had earlier tumbled to US$136 000 on October 30.
During the review period, daily total turnover averaged US$801 000, which is by comparison the average daily turnover recorded by some counters that are listed on the more sophisticated JSE Securities Exchange.
In good times companies such as Delta and Econet used to record similar figures. Generally, there is now a single call-over on the stock market since dollarisation in 2009.
On a good day, the trading session lasts up to an hour, with average turnover of around $1,5 million, dominated by less than five companies that usually include Econet and Delta Corporation.
In the past, two sessions were conducted.
Presently, weak investor sentiment is weighing on the market resulting in the ZSE crashing out of the top five performing bourses in Africa in 2013.
Since October 10, the mainstream industrial index has dropped 7 percent closing on 176.01 points.
Minings have plummeted 16,5 percent to 72,76 points during the same period. From last year’s 32 percent increase, industrials are down 13 percent so far this year, as Government cut 2014 GDP growth projections to 3,1 percent from 6,1 percent citing economy-wide sluggishness. However, the mining index made up of four counters — RioZim, Hwange, BNC and Falgold — has soared 59 percent on a year-to-date basis, helped by a strong rally in nickel producer, Bindura Nickel Corporation, which has tripled to US6c.
Equity analysts say many investors are sitting on the fence, uncertain of Zimbabwe’s economic future already strained by weak consumer spend, low industrial production and poor investor confidence.
“It’s obvious the economic environment has affected major investors. For example, pension funds have been badly affected, premiums are going down because companies are closing, the sources of funds are going down.
“The counters themselves are not doing well as earnings continue to decline. People are holding on to their portfolios,” said FBC alternative investments analyst Mr Albert Norumedzo.
ZSE’s biggest stock by market capitalisation, Delta, last week reported that revenue for the half year ending September 30 declined 4 percent on lower larger volumes due to weak demand.
Harare economist Mr Witness Chinyama said more attention has been on the political scene during the past month at the expense of economic growth. “The economy is not in a good shape,” said Mr Chinyama, adding that more efforts needed to be made to attract foreign direct investments into the country.
That way industry would start functioning again, easing pressure on other economic challenges such as unemployment and low disposable incomes.
