The Sunday Mail
Enacy Mapakame Business Reporter
CORPORATE earnings, most of which are for the half-year ended June 30, 2015, have failed to add fillip to trading activity on the Zimbabwe Stock Exchange (ZSE), with stocks dropping the most in two years. The first half reporting season ended on Wednesday September 30, 2015, with results from over 30 listed companies showing mixed fortunes.
By close of trade Tuesday, the mainstream industrial index was down 20 percent year-to-date at 131,91 points on sustained market-wide declines.
The index peaked at 233,18 points on August 1, 2013.
Weak commodity prices continue to drag the mining index lower.
The index, which has since been dropped from a record high of 282,04 points reached on June 23, 2009, has slumped 65 percent to 25,15 points from January’s opening 66,31 points.
Over US$850 million in value has been shaved off the market since the beginning of the year.
The total market capitalisation now stands at $3,44 billion.
Cement products manufacturer Turnall Holdings’ stock has remained unchanged at US0,95c despite recording a net profit of US$400 000 in the half-year to June 30, 2015 from a loss of US$2,6 million in the comparable year-ago period.
Year-to-date, the stock has plummeted 50 percent.
Over the past 52 weeks, Turnall Holdings Ltd has touched a high of US3c and a low of US1c.
ZB Financial Holdings Ltd’s share price only shifted marginally to US3,50c after reporting bottom line profit for the year to June 30, 2015 climbed to US$4,95 million from a loss of US$1,34 million a year earlier.
The stock has lost 2,8 percent since January.
Also, for the half-year to June 30, 2015 General Beltings reported a 47 percent increase in revenue to US$2,2 million.
Its losses narrowed to US$471 144, but its share price has remained flat at US0,01c.
On a year-to-date basis, the stock has lost half of its value.
Similarly, Pearl Properties stock has remained stagnant at US2,2c since September 14, two days before the release of its half-year financials.
The property concern reported its profit grew 14 percent to US$1,6 million on the back of cost-cutting measures.
Apparel retailer Edgars Stores Limited’s share price largely remains unmoved at US7,5c despite a 13 percent increase in profit to $1,2 million.
Even dividend payments from industrial behemoth Innscor Africa Holdings and its two subsidiaries — National Foods and Colcom Holdings — have failed to significantly stir the market.
On September 25, 2015, Colcom Holdings’ stock climbed US4 cents to US24c after saying it will pay out US1,8c per share in dividends to shareholders.
However, in its interim financials Colcom reported revenues slid 3 percent to US$64,6 million weighed down by a 10 percent revenue decline at flagship subsidiary, Colcom Foods.
Colcom Holdings Ltd shares have declined 20 percent since the beginning of the year.
Likewise, Innscor announced a dividend of US0,55c per share and its stock gained US0,10c to US59c as a result.
But National Foods Ltd, one of the ZSE’s top 10 counters by market capitalisation, traded unchanged at US299c after its earnings underwhelmed the market.
The food processor reported half-year revenues fell 8 percent to $314 million, which was below the market consensus of $340 million.
Net profit slowed to US$12,7 million from US$16,7 million prior year, while a US4,65c per share dividend was declared.
Market watchers forecast that the difficult trading environment on the local bourse will continue as the economy continues to slow.
The country’s economic growth estimate has been revised to 1,5 percent from the original 3,5 percent on poor performance in agriculture.
“The reporting season continued to reflect mixed performances for the companies as they grapple with Zimbabwe’s economic environment.
“Retailers have constantly found themselves realigning operations to stay afloat as deflationary pressures cut into margins,” stockbrokers EFE Securities said recently in a recent research note.
Experts say investors are presently shifting their portfolios to both the bond and the property market.
As part of efforts to broaden the capital markets, the ZSE is finalising details for setting up a bond market early 2016.
With the equities in decline, “investors have adopted a wait-and-see attitude and opting for alternative long-term investments such as property and bonds,” Harare equities analyst Mr Albert Norumedzo said last week.
“The stock market mirrors the economic environment. Even when one or two companies do well, the underlying performance is affected by the environment where they are deriving their performance from. Those good performances are not good enough to drive the market back in the black.”
Both small and big-time investors like pension funds are fretting over the future of their investments on the ZSE, killing off any further appetite for stocks, he said.
