Red Sea ZSE

taking_stockSELLERS dominated the market in the week ending November 27, 2009 characterised by massive losses that left the Zimbabwe stock Exchange in a sea of red as punters continued to cash in ahead of the festive season.

Since the ZSE adopted the US dollar as the trading currency, the Kingdom Meikles saga has been the only corporate event to spark some excitement in a market starved of real deals as far as mergers and acquisitions are concerned. It is no surprise therefore that the market welcomed news that young banking concern TN Bank were in talks with furniture manufacturer Tedco that may result in a reverse listing of the former in a move similar to the Barbican/Haddon & Sly deal of the early 2000s.

The acquisition of a controlling stake by TN Bank in the Simba Mangwende led Tedco that would lead to the reverse listing ensured the latters shares shot up 122.22% to end the week at US$0.02. Last weeks heavy loser Zimpapers bounced back to end the week 87.50% up on US$0.015 while pharmaceutical giant CAPS was up 66.67%. Agricultural inputs entities Chemco and Zimplow were up 50% and 30% respectively.

It was however losses in the larger companies that ensured the Industrial Index ended the week 4.21% down at 151.13. Of the top 5 largest companies by market capitalisation, PPC was down 16.07%, Econet 7.68%, Delta 9.09 and Innscor 15.71%. Only Old Mutual was up (4.71%) Heavier losses were recorded in the mining sector with Falgold losing half of its value to end the week at US$0.05 from US$0.10. Hwange was down 22.22%, Rio Zim 11.69% and Bindura 8% as the index closed down 7.37%.

The eagerly awaited signing of the investment protection deal between Zimbabwe and South Africa will play its part in building confidence as it gives investors reassurances that their investments will be protected from political interference. News that the Commonwealth was also looking to open the doors for the re-admission of the country to the club of former British colonies will only add to the confidence building exercise as such talk will resonate across other important sources of Foreign Direct Investment.

Courtesy of Zimbabwe Investor Magazine, incorporating Zimbabwe Investor Research Institute (ZIRI)., [email protected]

Post published in: Manufacturing

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