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NewsDay

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Election dispute weighs down ZSE

Business
THE Zimbabwe Stock Exchange (ZSE)’s market capitalisation lost over $200 million last week as the market indices continued to be held down by the uncertainty around elections, ZSE data shows.

THE Zimbabwe Stock Exchange (ZSE)’s market capitalisation lost over $200 million last week as the market indices continued to be held down by the uncertainty around elections, ZSE data shows.

BY TATIRA ZWINOIRA

According to trading data from the ZSE, in terms of a week-on-week performance for last week compared to the previous one, all the indices performed badly. The all share index retreated 2,41 points (2,11%), industrial index came off 7,89 points (2,06%), the top 10 index dropped 3,35 points (2,83%) and the mining index dropped 5,82 points (3,54%).

ZSE acting chief executive officer, Martin Matanda could not be reached for comment at the time of going to print.

The drop in the indices contributed to the drop in the market capitalisation which retreated 2,14% from $12,15 billion recorded the previous week.

MMC Capital executive director Itai Chirume confirmed to NewsDay yesterday that the loss in the market capitalisation was due to the market indices going down.

“It will be your indices (why the market cap was slightly down). When indices come down, it means that prices are coming down, so that would be the explanation. It would be no different to the explanation of indices because the indices are pretty much prices and if they come down the market cap will also come down,” he said.

“A lot of traders or a lot of investors had wanted to see how things panned out in terms of the electoral challenge, so I think people are just watching developments on the political space. You rather see how it pans out rather than commit heavily when there is a court challenge to the election result, so I think that is one thing that people were looking at closely.”

He said he expects the election uncertainty to continue for the next two weeks.

“My suspicion is that in the next two weeks as the ConCourt (Constitutional Court) works on the matter, we may also see trading will probably be sideways with people waiting to see what the outcome is. If nothing changes, then life goes on. So, in my view, what weighed down activity last week and will probably do so in the next 14 days,” Chirume said.

The Concourt challenge which MDC Alliance presidential candidate Nelson Chamisa placed before the courts last week is expected to have a verdict in the next 14 days.

Chirume said in terms of how he saw it, 80% of the slowdown on the ZSE was due to the uncertainty arising from the election petition and 20% due to the holidays which will end today.

IH Securities reported that trading in heavyweights was weak last week, with Delta, Econet and Innscor shedding 7%, 3,03% and 0,39%, respectively. However, the week’s top gainer’s were NicozDiamond, CBZ and First Mutual Properties, which grew 13,67%, 8,59% and 7,53%, respectively.

“The week’s largest losses were recorded in Masimba, down 20.40%, GetBucks, down 9,91% and Dairibord, down 7,14%,” IH Securities said.

Stockbrokers’ Association of Zimbabwe vice-chairperson Arnold Dhlamini agreed that two weeks would see the ZSE normalise.

“For me I would not give more weight for now, let us see what happens after the holiday (after today) I think we will have a better picture to see what happens because I think this election thing is still ongoing and has not been settled. But, I give it about two weeks where we should be back to normal and should be able to see prices normalising,” he said.