Published by the government of Zimbabwe
4 July 2008
Harare — ZIMBABWE Stock Exchange shares fell yesterday with investors reacting to the central bank's hike in accommodation rates.
Most investors anticipated investment rates to firm significantly yesterday but the market is still highly liquid on the back of the central bank's capital raising for tobacco payments, foreign currency and civil servants salaries.
Given that statutory reserves and treasury bills have remained at 50 percent and 350 percent respectively, money market rates are not expected to rise further and analysts have said the move by the Reserve Bank of Zimbabwe is purely academic. This has given a positive outlook on the stock market.
At the close of trades the industrials index lost 6 percent to 30 467 727 116 435.70 points and the minings index was down 8.76 percent to 35 254 099 369 723.20 points. Trading was however characterised by thin volumeKMAL lost $50 billion to $100 billion and Delta was down $1 billion to $39 billion.
Old Mutual was $40 billion to $200 billion and Econet shed $30 billion to $320 billion after mobile network operators hiked their tariffs by just 100 percent far below the expected hike of around $5 billion.
The tariffs translate to just below U.S. 1 cent, which is way below the regional average of U.S. 25 cents. South Africa's MTN charges around 38 US cents at R2, 89 a minute. The low tariffs are expected to continue to weigh down the group's earnings.
OK led the fallers after losing $1 billion or 50 percent to $1 billion and TA Holdings was $135 billion down to $165 billion.
Hwange lost $16 billion to $60 billion after the group said it had brought forward the major service on its dragline to July, following constant breakdowns, which had reduced output to 60 percent capacity. Once serviced capacity is expected to improve to 85 percent.
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