Industrial index losing streak continues

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The Zimbabwe Stock Exchange main index closed the first week of trade in 2012 in the red on Friday with turnover falling to $172 000.

The industrial index losing streak continued after it shed 0,14 points (0,10%) to close at 139,90 points.

The industrial index opened the year 1,14 points weaker at 144,72 points due to losses that dominated the first day of trading 2012 on Tuesday last week.

Old Mutual retreated 5 cents to 115 cents, Meikles was down 0,50 cents to trade at 14,50 cents and ABCH slipped 0,21 cents to settle at 79,79 cents. Star Africa lost 0,10 cents to close at 0,90 cents.

On the upside Innscor was a cent firmer at 55,01 cents, OK Zimbabwe gained 0,50 cents to trade at 10 cents while Edgars advanced 0,11 cents to 9,11 cents. ZHL pushed up 0,10 cents to
1,20 cents.

Week on week the industrial index was down 5,96 points (4,09%).

The mining index was however steady at 81,00 points. Bindura, Falgold, Hwange and Riozim were unchanged at previous levels. Week on week the mining index lost 19,70 points (19,56%).

Brokerage firm Renaissance Securities is however optimistic trading on the local bourse would rebound this year despite the uncertainty prevalent on the market at the moment.

Anthea Alexander, an Associate at Renaissance Capital last week said despite perceptions that economic growth is levelling off, results delivered by companies such as Delta Corporation, Econet Wireless Zimbabwe, and Innscor Africa in 2011 suggested otherwise.

Alexander said demand growth for their products suggests consumer spending continues to grow, driven by formal and informal market activity.

“While constraints to wider economic growth remain in place (agricultural output, foreign investment, utilities, etc) we still think disposable income growth will continue, driven mainly by small-scale agriculture (cash crops) and mining activities (formal and informal),” said Alexander.

“We think Delta, Innscor and Econet will be key beneficiaries. Agriculture is growing slowly off a low base but some crops such as cotton and maize are recovering more quickly. We think this will be positive for agri-stocks AICO Africa and Seed Co.”

Last year activity on the Zimbabwe Stock Exchange remained sluggish, as a result of uncertainties shrouding the implementation of the Indigenisation and Empowerment Regulations and liquidity challenges in the economy.