Zimbabwe: ZSE Activity 6,15 Percent Lower in 2012

ACTIVITY on the Zimbabwe Stock Exchange (ZSE) was 6,15% lower in 2012 compared to the prior year with total transaction value of US$448,179 million.

Total turnover value in 2011 was US$477,52 million.

Volumes were 23,79% at 3,5 billion shares from 4,61 million in 2011 weighed down by the tight liquidity situation and the shying away of long-term institutional investors and weak foreign investor sentiment. However, foreign investors turned to Zimbabwe mostly in the second half of the year because stocks were cheap as most of them had fallen to their lows and other markets in the region had risen leaving little room for further growth.

The mainstream industrials index closed with a year-to-date gain of 4,48% from 145,86 at January 1, 2012. The Minings Index however lost 35,33% from 100,70 points at the beginning of last year.

On the price sheet, Astra topped the year's performers on the ZSE with a gain of 150% as the Industrials Index closed New Year's Eve trades lower but with a marginal gain on 2012.

Astra, whose majority stake is held by the Reserve Bank of Zimbabwe, is up for sale closed with a year high trade of 5,5 US cents and a low of 2 US cents. BAT, which has denied industrial espionage allegations being leveled against it, closed the year with a 132,3% gain and a year high of 450 US cents.

The Meikles special bargain of 120,355 million shares worth US$21,06 million emerged as the biggest deal on the stock market last year. The deal was executed by LES stockbrokers at 17,5 US cents against the trading price of 19,01 US cents.

For two consecutive days in January 2012, deals in Meikles and Delta by Lynton-Edwards Stockbrokers set the highest deals by the stock market since dollarisation. The previous highest had been the special bargain of Delta shares amounting to 24,6 million worth US$17,2 million.

The special bargain occurred after the RBZ exchange control gave approval for the group to exchange its shareholding in Meikles Ltd with Gondor Capital Ltd, a non-resident entity.

Chairman John Moxon said the shareholding consolidated the Moxon Group's investment in Meikles Ltd into one investment Group, the position that pertained prior to the 2007 Meikles' merger. The Moxon Group says the transaction was done to mobilise substantial capital for the company in the international capital markets. The group was seeking to raise upwards of US$200 million.

Overall, there were 45 block deals on the stock market this year, much less than the 75 deals which went through last year. The total value of deals amounted to US$107,46 million.

LES dominated the trades, accounting for almost 23% of deals at 10, followed closely by EFE with nine deals or 20%. Imara conducted seven deals and IH Securities six, Old Mutual four while FBC and ISB are on three each, Invictus on two same as MMC and ABC and suspended Renaissance on one.

Generally, the low activity on the stock market has affected the performance of stockbroking companies.The declining brokerage fees mean that some of them are struggling to settle their transactions and are paying for deals piecemeal. Analysts say stockbrokers must consider merging or closing shop than put the market at risk.

Other notable deals include the 42 million Afre shares in February following the takeover by Nssa, the 185,7 million Ariston shares following the capital injection by Afrifresh, the 220 million shares in Dawn following African Sun's purchase and the 27 million TPH shares, which were sold to Zimplow.

In October, RenCap offloaded 40 million CBZ shares as the investment fund exited the country. The shares were purchased by CBZ under their share buyback programme. The last special bargain was of the 750 000 Seedco shares, which coincided with the company's briefing.

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