Economist, John Robertson, said there had been a scattered and uneven set of results reported in recent weeks.
“Most companies are not making profits and not declaring dividends and at the same time there are not many sellers offering shares to the market. This results in a subdued market,” Robertson said.
Struggling PG Industries Zimbabwe Limited recorded its third consecutive annual loss while Natfoods, whose after-tax profit vaulted by 112 percent to $7,63 million in the period to December 31, 2012, pushed up 13 cents to 208 cents on the stock market.
Other companies whose positive results did not seem to have a significant impact on the markets include Dairibord and Zimplow Holdings.
Another analyst, Lloyd Mlotshwa, said most companies were occupied with cutting costs.
“Most companies are concentrating on cutting costs by retrenching and while it is difficult to tell the exact figures because the statistics on jobs are not available, the situation does not inspire confidence in investors,” Mlotshwa said.
The Zimbabwe Stock Exchange has been driven by foreign investors whose participation rose from 23% in 2010 to 36% in 2011 and 41% in 2012.
Equities firm, IH Securities, said despite the lack of data on new portfolio inflows in 2012, the contribution of foreign turnover against total turnover continued to move upwards.
“We retain our position that these figures continue to be severely understated and believe that the contribution of foreign turnover is significantly higher given the clear dearth in local liquidity,” said the firm.
Local institutional and individual investors are hindered by the lack of liquidity whilst the majority of institutional investors have focused on holding on to equity investments for the long-term.
Post published in: Business