Finance Minister Tendai Biti on Wednesday December 2, 2009, presented his maiden Budget Statement to consolidate the economic gains of the eight months of Zimbabwes delicate political arrangement, but did little to ignite any significant movement on the stock markets.
The $2.25 billion budget has attracted mixed reaction from various sections with some saying it lacked ambition. Of particular interest to the Zimbabwe Stock Exchange was the slashing of transactions costs from 7.5% to 3.21% a figure which falls below the regional average of 3.5%. Although this welcome move will not have an immediate impact on the current trading, it will gradually attract more punters to the market over the coming months making 2010 a year to look forward to as the ZSE becomes cost competitive in the region.
In the week ending December 4, the Industrial Index was marginally lower closing 0.17% down at 150.87 from 151.13. Of interest was a deal that saw 5 million AICO shares changing hands between brokers Remo and EFE. Though it is not yet clear on whose behalf the transaction was completed on, it is believed could be related to the recent departure of Chief Executive Officer Happymore Mapara who is said to have walked away with a golden handshake package worth US$1 million.
Another counter which had a huge chunk of its shares changing hands was short term insurer Nicoz with 2 million shares being traded on Friday. The deal resulted in the share price end the week 200% higher at US$0.03 from the previous weeks US$0.01. The Mining Index performed better ending the week 3.80% higher at 198.17. Falgold led the sector doubling in price during the week to end at 10 cents. Hwange Colliery, which recently announced that it would be delisting from the JSE main board preferring the newly launched Africa Board as well moving from Londons main market closed the week 35.71% higher while mining concern Rio Zim was 2.44% lower. With a flat budget for 2010, the market will now be looking to the reduction in transaction fees to inject some life. Without a big financial injection into the economy, liquidity constraints will continue to dog trading in the coming year.
Article appears courtesy of Zimbabwe Investor Magazine; http/www.zimbabweinvestor.com, investments@zimbabweinvestor.com.
Post published in: Economy