Chief Business Reporter
The equities market is expected to remain weak due to simmering political tensions in the inclusive government, a development that has unsettled investors who have since adopted a wait-and-see approach, it has been learnt.
In its weekly bulletin, financial institution, Tetrad, said the situation on the Zimbabwe Stock Exchange (ZSE) was being compounded by controversy surrounding implementation of the indigenisation and empowerment programme.
“Of late there has been increased rhetoric from both Zanu PF and MDC –T camps. This is adding on to uncertainties regarding the implementation of indigenisation and economic empowerment laws in the country. We therefore anticipate the negative trend to persist on the market,” Tetrad said in its bulletin.
At least 173 mining companies have so far submitted their indigenisation proposals for consideration by the government.
Market capitalisation on the ZSE shed off just over $32 million by the end of April to close the month of May at $4,1 billion.
Data released by the ZSE contained in the Zimbabwe monthly economic review compiled by the African Development Bank for the month of June, show that the largest movers were Hwange, Aico Africa and Old Mutual.
According to statistics, equities trade on the ZSE has declined to daily turnovers averaging $600 000 from a peak of $1,5 million on account of liquidity challenges and declining investor participation.
“The ongoing indigenisation programme has increased uncertainty and adversely affected the confidence of international investors, particularly in the mining sector,” reads part of African Development Bank report.
Last week the industrial index lost 2,43% to end the week at 162,84 points.
The market was dominated by sellers with only 18 gainers while declining and static counters were equal at 29.
The mining index was also soft, slipping 3,51% to 182,87 points.