High investor risk aversion stifles trade on ZSE

HIGH investor risk aversion and competition from fixed income securities continues to stifle trade in equities on the Zimbabwe Stock Exchange (ZSE), stock market analysts have said.

In their report for the week ended June 22, leading stock broking firm Imara Edwards Securities (Private) Limited (Imara) said investors had last week focussed their attention on Econet Wireless Zimbabwe Limited (Econet), the country's leading telecommunications operator.

Econet has a subscriber base of more than seven million people and recently introduced its EcoCash Money Transfer facility for its subscribers.

The ZSE's Industrial Index closed the week down -1,34 percent at 130.36 points.

The Mining Index, on the other hand, stood at -0,09 percent with 81.51 points resulting in it closing in the red.

The weekly value of trades was down 54 percent at $8,1 million with sustained local buying in Econet seeing the giant emerge the best and most active stock traded on the ZSE.

"In vestors focussed their attention squarely on Econet and no other counters recorded any sizeable trades, Imara said in the report.

"Market turnover of $1,395,137 comprised predominently econet shares while none on the Mining stocks traded."

It said the Industrial Index shed 0,24 percent following another sharp loss in CBZ Financial Holdings Limited (CBZ), Zimbabwe's larget commercial bank.

"While the trades exhibited an undesirable pattern we take heart from the fact that noteworthy activity still took place in stocks outside the blue-chips during the course of the week," Imara said.

"High investor risk aversion and competition from fixed income securities continues to stifle trade in equities."

Last week Global Shareholder Limited, a private equity market watcher, revealed that Tawanda Nyambirai's TN Financial Holdings Limited (TNFH) had won the top counter on the ZSE.

The diversified firm stood at +625,00 percent, beating all other ZSE-listed counters.

In the top five were TNFH, Falcon Gold (Zimbabwe) Limited, (Falgold) at +200,00 percent, Pioneer (Zimbabwe) Limited (+200,00 percent), British American Tobacco Limited (BAT) (+106,90 percent) and Africa First Reinsurance Corporation Limited (Afre)(+54,55 percent).

TNFH has a market capitalisation of some $15 million with a share price of 3,99 cents.

Falgold, a mining counter on the ZSE, has a current market capitalisation of $6,1 million and a share price of 5,5 cents, Pioneer, a transport concern, has a market capitalisation of $4,398,117 and a share price of 8,00 cents, while BAT's market capitalisation right now stands at $25,724,645 with a share price of 148,00 cents.

Afre, the reinsurance giant, on the other hand, has a market capitalisation of $6,513,717 on the bourse and a share price of 3,00 cents.

The ZSE peformed poorly in 2011 as the Industrial Index eased 3,6 percent while the Mining Index slumped 49,8 percent.

Stock market analysts said the poor performance could be attributed to the scarece liquidity, unclear policies around economic empowerment and indigenisation and the EuroZone crisis.

The market retreated on thin volumes in normal trade as daily average value traded amounted to about $1,9 million, representing an average market turnover of a mere 0,04 percent, they said.

Meanwhile, the analysts said foreigners were net buyers last year and accounted for 71 percent of average daily turnover.

Post published in: Business

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