Blue-chip counters to dominate ZSE trades

Blue-chip counters will dominate trade on the Zimbabwe Stock Exchange (ZSE) in 2016 as they are the preferred choice by foreign investors, a research firm has said.


The prevailing illiquid conditions meant that foreign investors were the main players on the bourse as locals are incapacitated.

In a 2015 Economic Review & 2016 Outlook report, MMC Capital blue-chip counters would dominate trades.

Zimbabwe Stock Exchange chief executive officer  Alban ChirumeZSE chief executive officer Alban Chirume.

“On the back of the persistence of liquidity challenges locally, trades on the local bourse will mainly be propelled by foreigners and trading will be concentrated in blue chip counters which are dear to them,” MMC said.

“We have witnessed companies reporting depressed earnings in 2015 and our view is that the trend will likely continue, hence valuations will reflect declining corporate earnings.”

MMC said activity on ZSE would be depressed on the back of economic headwinds that would continue in 2016.

“Economic theory stipulates that there is a strong positive correlation between stock market performance and economic growth and since there is no economic stimuli in sight, activity on the ZSE will continue to be depressed,” it said.

Meanwhile, ZSE has removed Celsys Limited from its official list with effect from yesterday due to failure to comply with the Listing rules during the suspension period.

Celsys has been on voluntary suspension since August 2012 following a proposed takeover and reverse listing by Cambria Africa Limited through a scheme of Arrangement.

ZSE chief executive officer Alban Chirume said paragraph 1,8 in section 1 of the ZSE listing requirements compelled Celsys to continue complying with listing rules during the suspension period. He said ZSE noted that the company failed to publish financial statements for 2014 and 2015 financial years, non-convening of annual general meetings for the aforementioned years, non-provision of quarterly updates to shareholders and the ZSE and non-payment of annual listing fees for the years 2014 and 2015.

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