In a document made available to The Zimbabwean, leading stockbrokers, Imara Edwards Securities (Private) Limited (Imara), said the ZSE's turnover in the First Quarter of 2011 totalled $115,4 million compared to $132,6 million in the prior period.
"In the last 12 months the ZSE turned over $0,4 billion in value or 10 percent of total market capitalisation," Imara said in its document.
"Given the size of the market, patience is generally required to build a position and equally when Fund Managers want to sell. The market is characterised by high levels of local institutional investors who are relatively inactive compounding the liquidity problems."
The document has been made available to international investors including members from the Washington-based International Monetary Fund (IMF), the African Development Bank (AfDB), as well as the World Bank (WB) also based in Washington DC in the United States of America (US).
It points out that foreign participation in stock market trading was introduced in mid-1993 in Zimbabwe, following the partial lifting of exchange control regulations.
"Foreign investors may hold up to 10 percent of any ZSE-listed company without recourse to Exchange Control," the document said.
"Collectively, foreign ownership in a listed company may not exceed 40 percent of the issued capital of that company. These rulings exclude holdings which were acquired before June, 1993. Any violation of the limits would not "see registration".
The document said it would be reported by the Transfer Secretary to both the ZSE and the Reserve Bank of Zimbabwe (RBZ), resulting in a directive from the RBZ to the investor to sell any excess holding.
The RBZ is currently led by Dr Gideon Gono, former Chief Executive of the government-controlled CBZ Financial Holdings Limited (CBZ).
"Fungibility is permitted for some dually listed companies, namely Old Mutual Limited (Old Mutual) and Pretoria Portland Cement (PPC)," the document said.
Old Mutual is a major property and insurance firm with its head office in South Africa, while PPC is a major cement producer in Zimbabwe today.
The document shows that while in 1990 there were only 57 counters listed on the ZSE this has risen sharply to 81 this year.
It says that while in 1994 the annual company turnover In US dollars stood at only $176 million it had now risen to $392 million, having fallen from a high of $$437 million in 2009.
The Imara document said as far as market capitalisation is concerned, in 1990 turnover stood at $2,4 million, up to a high of $5,7 million in 1997, but decreasuing to $4,2 million last year.
The figues were based on the Old Mutual amounts from South Africa because during this time Zimbabwe used the worthless Bearer cheque, which was, however, delisted by the RBZ in 2009.
"In the last 12 months the ZSE turned over $0,4 billion in value or 10 percent of total market capitalisation," the Imara document said.
"The market is characterised by high levels of local institutional investors who are relatively inactive compounding the liquidity problem."
Zimbabwe is currently suffering from a serious liquidity problem but insiders in the commercial banking sector have told The Zimbabwean newspaper in separate interviews that "more than US$500 million is currently "sitting" in the coffers of mainly foreign-owned but "Zimbabwean-managed banks".
They include commercial banks such as Standard Chartered Bank Zimbabwe Limited (Stanchart), Barclays Bank Zimbabwe Limited (Barclays) and Standard Bank Zimbabwe Limited (Stanbic).
While Stanbic is controlled from neighbouring powerhouse, South Africa, Stanchart and Barclays are controlled from London, in the United Kingdom.
Post published in: Business Analysis