Business / Economy
'Zimbabwe Stock Market back to 2010 levels'
27 Sep 2015 at 05:17hrs | Views
PERFORMANCE of the Zimbabwe Stock Exchange has been equated to the 2010 levels with some stocks trading at the same prices as five years ago as the bourse continues on a free fall. According to market analysts, the ZSE has been falling at a marginal rate and is to date 19,22 percent down since the beginning of the year.
Research analyst Mr Kudzanai Sharara said 2010 was characterised by pockets of growth in various sectors and well capitalised companies were picking up from hyperinflation levels. He said the economy mainly stabilised in 2010 coming from a very low base.
Explaining what makes the prevailing situation at the ZSE a 2010 level, Mr Sharara said the market prices which started responding positively from that year to the end of 2012 were now back to low levels which were witnessed before the stability.
"OK Zimbabwe at the moment is trading at July 2010 prices and the big stocks like Econet and Delta are also not performing well. Most of the listed stocks are recording declining revenues and profitability. The outlook is gloom with no positive growth story," said Mr Sharara.
He said the challenges facing the ZSE were not limited to the country only but that the entire region and emerging markets were being affected by their currencies weakening against the US dollar.
"Only Botswana and Namibia have recorded growth in the US dollar share price. Currencies are getting weaker against the dollar and in actual fact Zimbabwe is at a better position compared to countries like Zambia," said Mr Sharara.
Stockbrokers Lynton-Edwards said the local stocks did not have a clear growth catalyst.
"At the moment, local stocks don't have a clear growth catalyst. News that most big companies such as Delta and Econet are looking at streamlining operations point towards tough trading conditions in the economy with very few opportunities for growth," said the stockbroker.
The mining index which is 64,93 percent down since the beginning of the year has failed to attract other mining counters due to the unavailability of money in the economy. The mining sector requires huge capital injection and its projects are long-term in nature.
In his Mid-Term Fiscal Policy Review, Finance Minister Patrick Chinamasa said the ZSE had been underperforming during the first half of this year due to low disposable incomes, weak aggregate demand, reduced foreign investor participation, poor performance by listed companies and liquidity challenges, which had an adverse impact on retail participation.
Research analyst Mr Kudzanai Sharara said 2010 was characterised by pockets of growth in various sectors and well capitalised companies were picking up from hyperinflation levels. He said the economy mainly stabilised in 2010 coming from a very low base.
Explaining what makes the prevailing situation at the ZSE a 2010 level, Mr Sharara said the market prices which started responding positively from that year to the end of 2012 were now back to low levels which were witnessed before the stability.
"OK Zimbabwe at the moment is trading at July 2010 prices and the big stocks like Econet and Delta are also not performing well. Most of the listed stocks are recording declining revenues and profitability. The outlook is gloom with no positive growth story," said Mr Sharara.
He said the challenges facing the ZSE were not limited to the country only but that the entire region and emerging markets were being affected by their currencies weakening against the US dollar.
"Only Botswana and Namibia have recorded growth in the US dollar share price. Currencies are getting weaker against the dollar and in actual fact Zimbabwe is at a better position compared to countries like Zambia," said Mr Sharara.
Stockbrokers Lynton-Edwards said the local stocks did not have a clear growth catalyst.
"At the moment, local stocks don't have a clear growth catalyst. News that most big companies such as Delta and Econet are looking at streamlining operations point towards tough trading conditions in the economy with very few opportunities for growth," said the stockbroker.
The mining index which is 64,93 percent down since the beginning of the year has failed to attract other mining counters due to the unavailability of money in the economy. The mining sector requires huge capital injection and its projects are long-term in nature.
In his Mid-Term Fiscal Policy Review, Finance Minister Patrick Chinamasa said the ZSE had been underperforming during the first half of this year due to low disposable incomes, weak aggregate demand, reduced foreign investor participation, poor performance by listed companies and liquidity challenges, which had an adverse impact on retail participation.
Source - sundaynews
