The Sunday Mail
Enacy Mapakame
African stocks have been on a free fall in the past 12 months, with six of Sadc’s top eight markets declining between 1,8 percent and 14 percent since the beginning of the year.
Market watchers are, however, betting on a better times ahead as global metal prices improve, African Financials – a finance news portal focusing on investment in Africa – has said.
The Malawi All-Share index has slumped 14 percent on a year-to-date basis, while the Lusaka Stock Exchange has lost 13,4 percent of value in the same period.
The Johannesburg Stock Exchange, the continent’s largest bourse, is down 4,3 percent after it narrowed losses from 6,8 percent in March.
In Nigeria, shares have retreated 22,5 percent in the past 52 weeks. Shares have dipped 16,9 percent and 13,4 percent in Zambia and Kenya, respectively. In the review period, Zimbabwean stocks have lost 30 percent of their value.
As at May 13, only stocks in Kenya and Nigeria had gained, rising 0,7 percent and 1,8 percent in that order.
Investors have been reluctant to invest in regional stocks as most are supported by the extractive sector, which has been hit hard by falling commodity prices on international markets.
The boom cycle of commodities reached its peak in 2011/2012 and the bubble burst in 2015 but the recent recovery in prices has renewed optimism that current losses can be reversed.
Mr Albert Norumedzo, an investments and equities analysts, said there was a correlation between stocks and general economic performance.
“If prices of commodities improve, we tend to see recovery on the equities markets as well. As the prices jump, this filters to economies with companies producing such commodities,” he said.
On a year-to-date basis, gold and platinum prices improved 20 percent and 22 percent respectively.
Last week, Innscor Africa Limited’s retail and distribution unit, Axia Corporation Limited, debuted on the ZSE, becoming the third subsidiary of the group to trade separately after Padenga and Simbisa listed in 2010 and 2015 correspondingly.
A total of 51 134 Axia shares changed hands on its first day of trading as the share price closed at USc35.
At close of trade on Wednesday, market leaders Delta and Econet had weighed down the industrial index to 108 points. Delta lost 0,13 percent to close at USc74,89 while Econet dropped 0,09 percent to USc22.
The mining index remained flat at 23,10 points.
Significant losses were also seen in Dairibord, which fell 8,3 percent to close at USc5,5 after the country’s largest milk processor reported revenue declined six percent in the four months to April.
However raw milk intake for the group grew 17 percent from a year earlier.
