eBusiness Weekly
Business Writer
The Zimbabwe Stock Exchange lost more than 37 percent in the last six trading days as the country went through a rollercoaster period that ended with the resignation of president Robert Mugabe on Tuesday.
Analysts say the political changes that will culminate in today’s inauguration of a new president in the form of former Vice President Emmerson Mnangagwa has brought back some confidence in the economy resulting in speculators selling off shares.
For the better part of the year investors have been buying into stocks as a safe haven amid currency uncertainties, but there is hope that this will change with the coming in of a new President and Government.
As we report elsewhere in this publication, investors are already making enquiries and are looking for investment opportunities in the country.
By the close of trading on Wednesday, the ZSE’s mainstream Industrials Index had lost 37,5 percent to close at 329,63 from 527,27 last week.
The mining index was slightly lower after it shed 6,01 percent to 129,82 from 138,12 for the comparative prior period. The Industrials is however still up 201,7 percent year-to-date.
Market capitalisation for the period also came down quite significantly to $9,41 billion from $14,79 billion prior period, with Delta losing $2,23 billion to $1,57 billion, while Econet lost $1,56 billion to $1,38 billion.)
Market cap rose in historical Old Mutual Implied Rate terms to $4,127 billion because most shares did not follow the OMIR rate down. A full market correction of second liners is only likely over the next two weeks.
There were no fallers in OMIR terms because the OMIR drop was outpaced by the limit down fall in the bellwether Delta.
Delta, the 20th best performer last week in the year-to-date category at 243,5 percent, is now the 10th worst performer in the year at 41.2 percent (that is, it is now ranked at 47th from 20th a week previous). Once the rest of the market corrects, it will probably return to its pre-liquidity induced bull run (before July 1) position (18th).
Activity was still strong during the period after shares worth $52,7 million changed hands, although this was lower than the $73,6 million that changed hands for the comparative prior period.
This week the bulk of the funds were invested in Econet which got $40,8 million on a volume of 29,4 million. The counter closed the period down 53,13 percent to 86,25 cents.
A total 30 counters closed in the red while only two were positive. Proplastics and RioZim were the only risers up 2,63 percent and 0,21 percent to 7,8 cents and 120 cents respectively.
Delta led the fallers after it lost 58,88 percent followed by Old Mutual which dropped 58,53 percent.
Seed Co was also a notable faller down 45,14 percent to 175 cents. The Group however reported a 45 percent jump in revenue for its results for the half year ended 30 September 2017. This was after maize seed sales volumes increased by 34 percent while winter cereals sales volumes put on 251 percent.
