ZSE records its biggest pull-back

17 Nov, 2017 - 00:11 0 Views
ZSE records its biggest pull-back

eBusiness Weekly

Business Writer
The Zimbabwe Stock Exchange recorded its biggest pull-back in more than a year yesterday as investors rushed to crystalise profits amid speculation in the wake of the current political impasse.

By the close of trading the main Industrials Index had lost 7,46 percent or 39,34 points to 487,93 while the mining Index eased 2,69 percent to 134,4.

The market capitalisation also weakened losing as much as $1,1 billion to $13,8 billion.
The day’s biggest deal was recorded in Econet after more than 18,5 million shares worth $31,1 million changed hands at 167,47 cents, 8,84 percent lower than Wednesday’s price.
Total turnover for the day was just above $31,5 million.

Delta was the day’s biggest loser after it dropped 19,96 percent to close at 254,5 cents. Activity in the counter was however subdued with only 1,000 shares worth $2,545 changing hands. The company recently reported its results showing a slight increase in revenue of just one percent.

Dual listed PPC which is subject to takeover bids also lost value down 17,2 percent to 272,97 cents. Also on the downside was Seedco down 1,13% to 317 cents and Lafarge down 10 percent to 144 cents.

Analysts said the fall is a result of speculation as investors expect normalization of the country’s political and economic situation following the temporary takeover of the country by the military.

Investors believe whatever happens after the temporary period there will be a positive change in how government runs the economy.

In his address to the nation before the military took over, Zimbabwe Defence Forces Commander General Constantino Guvheya Chiwenga pointed to the fact that there has not been an meaningful development in the country for the last five years.

“As a result of squabbling within the ranks and file of Zanu (PF), there has been no meaningful development in the country for the past five years. The resultant economic impasse has ushered-in more challenges to the Zimbabwean populace such as cash shortages and rising commodities prices.

Gen Chiwenga is not the first public figure to raise sentiments that all is not well in the economy. His statement, dovetails into what President Mugabe has since been saying that a lot needed to be done in the economy with regard parastatals performance and the area of good corporate governance.

Addressing captains of industry at State House in Harare recently, President Mugabe said non-performing parastatals and State enterprises must be dissolved as they are stifling economic growth through perennial dependence on the fiscus.

“I can reveal to you a Cabinet secret,” he said. “We were discussing this subject on Tuesday. I was very negative about it and I could see the (the former) Minister of Finance (Patrick Chinamasa) getting more and more depressed by my speech which ended by these are non-performers what we must do is to find coffins for them and bury them with the words Rest in Peace.”

Expectations are that since there is now a common understating that all is not well in the economy, government will emerge from this crisis with shared goals of revitalizing the economy. This is likely to result in the stabilisation of the country’s monetary systems and strengthening of the US dollar.

“Investors are likely crystalising some profits in anticipation of a strengthening USD. This is all speculation but if the US dollar strengthened investors will get better value for shares sold at current levels,” said a market analyst.

“There is also a strong possibility that buyers are now being cautious and going to the terraces as they await to see how the situation will prevail.

Share This:

Sponsored Links

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds