7 December 2017

Zimbabwe: Market Awaits 2018 Budget

TURNOVER was low on the Zimbabwe Stock Exchange this week as investors exercised caution while waiting for the 2018 National Budget amid signs that foreign interest in local stocks was being rekindled.

Weekly turnover since Thursday last week amounted to $24 million which is way below the market's standard as seen over the past 10 weeks. The rough average for weekly turnover over the past 10 weeks was $40 million.

An analyst with a MMC Capital, Kudzanai Samudzi, said the low turnover this week was a result of investors taking a wait and see approach as the nation waits for the 2018 budget set to be presented by the Minister of Finance today.

"Trading activity was relatively lower, with trades being concentrated in a few blue chip stocks. Our view is that a lot of investors were seeking further policy direction from the 2018 National Budget, hence the wait and see approach. Pronouncements will likely be very material and the direction of the market will hugely depend on the outcome of the policy measures. Key inputs in equity valuations, in order to ascertain whether to buy or sell stocks, are driven from such," said Samudzi.

Foreigners were net buyers in all of the ZSE's trading sessions since Thursday last week. Foreigners bought shares worth $5,22 million during the period under review and disposed of holdings amounting to $1,93 million equating to net purchases of $3,3 million. This could be a sign of foreigners' confidence in the new political dispensation.

The industrial index lost 7,79 percent to close yesterday at 342,15 points following weekly losses in major counters. Delta lost 21,4 percent week on week since Thursday to close yesterday at $1,5569. Econet shed 6,95 percent to settle at $1,0975. Old Mutual was down by 19,76 percent during the week to close at $4,7974 while Innscor dropped 0,39 percent to close at $1,0957.

Offsetting the losses were gains in selected counters. SeedCo gained 18,66 percent week on week to close at $2,0937. Larfarge picked up 10,38 percent to trade at $1,3798 while Barclays was up by 7,62 percent to trade at $0,065. The mining index gained 4,54 percent during the week to close yesterday at 132,46 points following gains in Bindura Nickel Corporation and Riozim of 20 percent and 0,16 percent to settle at $0,0426 and $1,1999 in that order.

Market capitalisation decreased by $800 million during the week to closer yesterday at $9,82 billion.



Graves 'Abandoned' As Mugabes Snub Heroes Day Celebrations

THE graves of former President Robert Mugabe's late wife Sally and his sister Sabina, which used to be the centre of… Read more »

See What Everyone is Watching

Copyright © 2017 Financial Gazette. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.