Share prices on the Zimbabwe Stock Exchange (ZSE) closed the first six months firm as a result of renewed interest by investors on the local bourse, analysts have said.
The market capitalisation for the period under review averaged between $4 billion and $4,2 billion compared to a decline from $3,9 billion to $3,1 billion for the same period last year.
Market capitalisation is a measurement of size of a business enterprise (corporation) equal to the share price times the number of shares.
According to statistics made available by the stock exchange during the first six months of the year, the month of February recorded the lowest market capitalisation of $4 101 652 975 while June had the highest market capitalisation at $4 267 499 844.
A Harare-based analyst said: “Prices strengthened due to renewed interest and demand over the period.
“Heavy counters reported impressive results that lured investors to come in and take positions on the prospects of getting higher earnings in the outlook period.”
Figures from ZSE indicate the industrial index has been on an upward trend having started the year at 161,10 percentage points in January to 167,18% at the end of last month indicating a surge of 3,8% during the first six months of the year.
In February shares worth $47 477 520,86 were traded before turnover declined to $36 374 501,59 in March, $35 497 749,67 in April and $28 895 279,98 in May when indigenisation and empowerment regulations were published.
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In June, shares worth $42 908 449,50 were traded. According to ZSE statistics, foreigners were the most active on the bourse after buying 85 326 721 shares worth $14 759 085,36.
They sold 140 363 750 shares worth $17 725 119,77. Foreign investors have been driving activity on the ZSE as locals do not have the cash to participate due to liquidity constraints.
However, the mining index slowed down to 171,32 percentage points in June from 216,82 percentage points in January.
Analysts said the mining index has been on a downward trend due to investment concerns looming over the mining sector emanating from the implementation of the indigenisation and empowerment regulations.
“The mining sector is facing a dilemma and investors are not sure of the ultimate outcome. This is also reflecting on the prices of mining counters that have been declining.”
The indigenisation law introduced by the government last year has impacted negatively on mining counters as they require huge capital inflows for their projects to take off.
Bindura Nickel Corporation share price used to trade at between 18-20 cents but now it is between 9 to 10 cents.
Economist John Robertson said the performance of the local bourse in the first six months indicated investors remained discouraged by the obtaining political environment.
“The political environment is not attracting new investments in the existing businesses in the country.
“We need more investments in the country,” he said.
