Zimbabwe: Stocks Plunge 5,5 Percent Amid Tight Liquidity

Stocks plunged 5,5% last week, amid rising selling pressure, as investors liquidated their positions, resulting from inflation fears and the general tight liquidity conditions in the market.

Analysts say investors are liquidating their investments to raise liquidity after a ZW$400 million mop-up left markets dry.

Investors are also concerned by Finance minister Mthuli Ncube's decision to suspend publication of inflation numbers.

"Selling pressure has largely contributed to the market decline in the last couple of weeks. Investors are also liquidating their positions to raising funding in a market with very tight liquidity conditions. Also, the fiscal policy review statement of last week brought with it an electricity price hike. This, along with fuel price and other increases of raw materials means all cost components are going up. This is more or less encouraging disinvestment," an analyst said.

"Others are exiting the market to raise financing for operations also holding on to the US as hedge against inflation."

The mainstream All Share index ended July 5,12% weaker. Industrials fell 8,65% in the same period while the Top 10 index gave up the highest, down 14,05% in the period. Last week alone, the total market capitalisation fell 3,43% to close at ZW$24,18 billion or around US$2,4 billion at black market rates.

The All Share Index ended the week to Friday 2,46% lower at 185,81 points, while the Top 10 Index was down 4,26% to 172,77 points.

The Industrial Index shed 3,13% last week to 616,00 points, whilst the Mining Index fell 0,81%ending the week at 244,5 points. Trading in heavyweights was weak last week as Econet, Cassava and Delta recorded losses of 8,19%, 7,16% and 2,82%, respectively.

The week's top gains were realised in ART, CBZ and Zimplow up 12,5%, 11,78% and 11,11%, respectively.

The week's biggest losses were registered in Willdale, down 28,57%, Masimba down 19,84% and Mashonaland, down 15,80%.

Volumes traded totalled 33,28 million shares and averaged 6,66 million shares per day. Weekly turnover totalled ZW$29,28 million and averaged ZW$5,86 million daily. Activity was highest in Econet, Delta and CBZ, contributing 36,80%, 11,43% and 8,36%, respectively.

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