The Sunday Mail
SHARE prices on the Zimbabwe Stock Exchange were largely volatile as the choppy market struggled for direction, swinging from one end to another on weak investor sentiment and poor corporate earnings.
The mainstream industrial index fell in four consecutive trading days to Thursday, dropping a combined 2,4 percent or 3.97 points to 162.62 points as heavyweight counters tumbled.
The index is down 1 percent since January 2.
The mining index remained flat in the review period, easing 0,75 percent or 0,41 points to 54,29 points after gold miner Falgold was offered lower at USc0,50 from USc1.
Total market capitalisation has shed more than US$100 million since the beginning of the year to US$4,2 billion.
Average daily turnover has hovered around US$100 000, as foreign investors, who make up two-thirds of the ZSE trades, stayed away.
Daily turnover hit a six-year low of just US$23 000 early January.
Government has reviewed the country’s economic growth forecast to 3,1 percent this year on low commodity prices and lower-than-anticipated output in agruculture.
Initially, Treasury expected agriculture to grow 23 percent in 2015, but bad weather and erratic rains are working against the forecasts.
On Wednesday, Acting President Emmerson Mnangagwa told Parliament that Cabinet had approved a financial plan for grain imports to cover anticipated domestic shortfalls.
Agriculture-linked stocks are already taking a knock.
Tobacco processor TSL Limited plunged 20 percent to USc25 on March 4 following reports of disruptions at the tobacco auction floors, as the marketing season opened.
The stock, however, recovered USc4 the following day.
TSL Limited group chief executive Mr Washington Matsaira told the company’s AGM in Harare on Wednesday that he expected earnings for the current financial year to remain flat on lower tobacco output.
The company reported an after tax profit of US$4,9 million in 2014, down from US$5,8 million a year earlier.
Heavily capitalised counters have pulled the market down.
Beverage maker Delta had dropped USc6,10 or 6 percent to USc108,90 in the past week, and Econet was down USc2 to USc51 by close of trade Thursday.
Innscor Africa Holdings Ltd lost USc1 to USc57 after reporting net profit plummeted 64 percent to US$23 million during the half-year to December 2014.
On Thursday, Larfage was offered USc5 lower at USc40 after the cement maker reported full-year 2014 profit skid 97 percent to US$81 000 on lower volumes.
The stock is down 27 percent on a year-to-date basis.
ABC Stockbrokers said: “Lafarge has generally become less efficient in the last two financial years and there is a dire need by management to address this problem as well as the high cost structure that is eroding the returns to shareholders.”
Market watchers maintain low international commodity prices, low industrial activity and company closures will remain among the top major impediments to economic growth, subsequently affecting the equities market.
On a year-to-date basis, most counters have experienced declines in total trades compared to same period last year, among them Delta, Econet, Dairibord, Old Mutual, Zimplow, Hippo, OK, Fidelity, Ariston, Lafarge and all the minings counters, except Bindura Nickel Corporation.
However, Innscor, Turnall, Afdis, National Foods and Bindura are among the few counters that have recorded gains relative to the same period a year ago.
“On the local economy, we maintain our view that the upside potential of the Zimbabwe Stock Exchange remains under pressure on the back of poor macro-economic conditions besetting the economy,” said MMC Capital in their weekly report.
Analysts, however, believe top market movers will cash in on the negative sentiment as bargain hunters move in.
This trend is expected to dictate the pace of the market.
