HomeBusinessZimbabwe Stock exchange indices on a nosedive

Zimbabwe Stock exchange indices on a nosedive

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THE Zimbabwe Stock Exchange (ZSE) indices have been on a decline path since the beginning of this month, indicating the challenges being faced by listed companies.

VICTORIA MTOMBA
BUSINESS REPORTER

The industrial and mining indices have been on a decline path since the beginning of this month.

As of yesterday, the industrial index stood at 189,98 points, while the mining index stood at 87,17 points.

The industrial index started the month at 194,71 points.

The mining index started on 89,16 points beginning of this month.

“Generally, the operating environment in Zimbabwe remains tough and trading activity continues to be weighed down by these sentiments. However, there were some trading ‘spikes’ in the market mainly on the back of block trades in Zimplow, Econet and Delta,” research firm MMC Capital said.

It said the market was likely to trend northwards in the short to medium term.

“The shortage of shares relative to demand, particularly those that are dear to foreigners [Econet, Delta, Innscor and Natfoods], will likely result in positive trading. In order to entice those holding the shares to sell, buyers will have to offer a premium,” MMC Capital said.

The market capitalisation started the month at $5,6 billion and as of yesterday, stood at $4,86 billion.
Listed companies that have reported their financial results have cited unavailability of working capital, low aggregate demand, high cost of borrowings and low liquidity levels as some of the major challenges that companies were facing in this environment.
Since the beginning of the year, activity on ZSE has been dominated by consumer stocks and blue chip counters.

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