Foreign investors will dominate trading on the Zimbabwe Stock Exchange (ZSE) in the last half of the year targeting mainly blue chip counters, a leading brokerage firm has said.
BY BUSINESS REPORTER
In a report Zimbabwe H1 2016 Equities Review, MMC Capital warned that economic headwinds would continue mounting in 2016 as there was no economic stimuli in sight which would likely improve the country’s economic fortunes in 2016.
It warned that the infighting in the ruling Zanu PF was anathema to attracting foreign direct investments to reboot the economy.
“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 Capital said.
It said companies reported depressed earnings in 2015 warning the trend would continue.
“We therefore advocate for a defensive investment strategy in 2016 — holding mature, low debt and dividend paying stocks,” it said.
In its stocks pick, MMC Capital listed Delta, Econet, SeedCo, Simbisa, National Foods and Padenga with a buy tag.
In the first half of the year, foreign investors drove ZSE with trades by foreigners accounting for 63% of the total trades during the period. In the same period in 2015, foreign trades accounted for 51% of the trades.
The total value of trades was $89,29 million in the first half of the year down from $137,73 million recorded in the same period in 2015.