Zimbabwe Stock Exchange continued its downward spiral in its first full week of trading following a flat budget statement by the Finance Minister Tendai Biti ending December 11, 2009. The market had for months awaited the budget statement hoping it would provide enough stimuli to shape the trading pattern for the year 2010. The biggest announcement the market welcomed was the significant review downwards of the transaction costs to 3.21% otherwise the economy needs to attract significant capital injection for any meaningful trading to start.
In the week under review, the Industrial Index slid down 3.06% from 150.87 to end at 146.25 points. Celsys halved its value in a days trading when over 1 million shares changed hands on Friday. Powerspeed was another heavy loser ending the week 33% lower while Zimpapers dropped 30.77%. Agricultural inputs company, Chemco was 28.57% lower. The 100% increase in the small-caps Medtech and Pioneer would have done little to stop the industrials from sliding. Industrial conglomerate ended the week 60% higher while financial services provider Fidelity was 53.85%.
The Mining Index did not fair much better ending the week 2.25% lower. Falgold was the worst performer losing 30% while Hwange was down 21.05%. Bindura however was in positive territory closing 8.70% higher.
The intended marriage between TN Financial Holdings and Tedco remained the only story in town with more details being revealed. TNFH is acquiring 70% of Tedco before announcing a reverse listing. Only three directors from the current Tedco board are expected to make the new board after the takeover. With the market still recovering from the Meikles-Kingdom debacle, it is hoped that this marriage between a bank and a furniture concern will be a happy one.
In the same week, one of the political parties in the inclusive government, Zanu PF, held its congress to shape its future. Any pronouncements by the leadership would have been closely monitored across the globe as they may impact the delicate relationship with the other partners.
Courtesy of Zimbabwe Investor Magazine. www.zimbabweinvestor.com, research@zimbabweinvestor.com.
Post published in: Economy