FOREIGN investors will continue to drive the stock market as liquidity challenges continue to push out local investors, a local research firm has said.
Business Reporter
MMC Capital said the market will remain under pressure as the economy runs out of steam.
“Foreign investors will continue to be the major drivers of the market as the participation by locals remains depressed by the obtaining liquidity squeeze,” the firm said.
Zimbabwe has been experiencing liquidity challenges since 2009 when it adopted the multi-currency system as no major financial inflows were made to the country.
Foreign direct investments is still ranked lowest in the region. The research firm said the improvements in relations between the country and the European Union is most likely to help the country in accessing medium to long term capital. The EU last week removed some people from the sanctions list except President Robert Mugabe and his wife Grace.
Zimbabwe has been suffering as it has been failing to attract foreign currency and to transact with the EU due to sanctions.
The industrial index opened the week weaker after losing 0,46 points to open at 190,25 points after closing last week at 190,71 points. The index gained last Friday on the good performance of beverage maker Delta and telecommunication firm Econet; and Hippo.
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The mining index opened the week 2,41 points firmer to 34,42 points. Total market capitalisation for the market stood at $4,93 billion as of Friday last week.
Turnover rose to $6,5 million as of Friday from $5,7 million the previous week.
Foreigners were net buyers last week having bought $3,31 million and sold shares worth $1,71 million.
