×
NewsDay

AMH is an independent media house free from political ties or outside influence. We have four newspapers: The Zimbabwe Independent, a business weekly published every Friday, The Standard, a weekly published every Sunday, and Southern and NewsDay, our daily newspapers. Each has an online edition.

Local bourse performance on free fall

Business
PERFORMANCE of the Zimbabwe Stock Exchange (ZSE) continues on a downward path since the beginning of the year due to economic challenges in the economy that have affected many listed counters.

PERFORMANCE of the Zimbabwe Stock Exchange (ZSE) continues on a downward path since the beginning of the year due to economic challenges in the economy that have affected many listed counters.

BY VICTORIA MTOMBA

The market capitalisation for the ZSE declined by $1,7 billion to $3,5 billion in August this year compared to the same period in August 2014 where it stood at $5,2 billion.

Market capitalisation for the local bourse took off at $4,36 billion in January 2015 and by the end of August, stood at $3,55 billion, showing a decline of $810 000 in terms of value.

Market capitalisation represents the total dollar market value of all of a company’s outstanding shares.

The industrial index has also declined and stood at 135,43 points compared to 196,43 points in August last year.

The total turnover for the eight months to August was $172 million, down 47,23% from the $326 million recorded during the same period last year.

The main industrial index last traded below current levels in September 2012 when it traded at 132,82 points.

During the month under review, 19 stocks closed in the red and 13 traded in positive territory.

The mining index went down to 35,34 points from 58,13 points in January.

zim stock exchange

The mining index on the ZSE market shows the performance of the four listed mining companies that include Hwange, Bindura, Falgold and RioZim.

The four counters performance has not been pleasing, but Bindura has been the mining index’s major driver since last year.

Stockbrockers Lynton-Edwards said of the outlook: “At the moment, local stocks don’t have a clear growth catalyst. News that most big companies such as Delta and Econet are looking at streamlining operations point towards tough trading conditions in the economy with very few opportunities for growth.”

The market has failed to attract other mining counters due to the unavailability of money in the economy.

The mining sector requires huge capital injection and its projects are long-term in nature.

In his Mid-Term Fiscal Policy Review, Finance minister Patrick Chinamasa said the ZSE had been underperforming during the first half of this year due to low disposable incomes, weak aggregate demand, reduced foreign investor participation, poor performance by listed companies and liquidity challenges, which had an adverse impact on retail participation.