Local bourse market cap up to $4 billion


MARKET capitalisation increased during the month of December to $4 billion as of yesterday from $3,8bn in November despite the poor performance of counters listed on the Zimbabwe Stock Exchange (ZSE).


During the year, market capitalisation has been on a see-saw, ranging between $2,6bn and $3,3bn.

The industrial index yesterday stood at 145,60 points down from 145,97 points recorded on Wednesday. The mining index was flat at 58,51 points.

In an interview, a local analyst said the performance of the local bourse in 2016 had nothing to do with the performance of the counters on the market, as most of the companies were struggling throughout the year.

The economy had uncertainties’ due to the coming of bond notes, which were announced in May this year and were introduced in November.

“It is more of the macro-economic issues that boosted the performance of the ZSE mainly due to currency issues as most investors were uncertain on the impact of the bond notes and they moved most of their money into equities,” the analyst said.

Companies on the stock exchange declared dividends, but due to the current liquidity challenges, were unable to access the cash as it was not available.

For some investors, it took them two months or more to access cash from the banks when under normal circumstances, the payments should be through in seven days.

The mining index has been ranging between 19 and 33 points from the beginning of the year to October. It rose to 57,38 points in November.

A research analyst with a local firm said the indices on the stock market were not pleasing during the first nine months of the year, but they were pushed by the uncertainties that surrounded the bond notes.

He said most local institutional investors moved assets that were near to cash to stocks.

As of the end of November this year, total turnover stood at $167 million, according to statistics from the local bourse.

The cash crisis is still persisting because the central bank has injected $29m bond notes in the market when the banking sector used to import $15m per week, making the new injections inadequate to meet the needs of the market.

The demand for cash is still continuing with experts pinning their hopes on the 2016/17 tobacco selling season, which is expected to inject liquidity into the market.