The weakness on the Zimbabwe Stock Exchange persisted last week with all four indices closing in the negative territory as panic increases due to inflation fears work their way out. At the close, the main industrials index had lost 3,29 percent in the week, while the newly introduced ZSE All Share Index was down 3,37 percent to close at 91,49.
The ZSE Top 10, also new, was the week’s biggest loser after it dropped 4,04 percent to close at 90,58. The Mining Index was, however, positive adding 0,11 percent to close at 134,52.
Last week’s losses pushed the market further into the red, with the Industrials Index now 8,2 percent lower since the beginning of the year. The mining Index is down 5,53 percent year-to-date, the All Share Index down 8,51 percent. Again the ZSE Top 10 is worse off after losing 9,42 percent. On Friday there were seven fallers against five risers.
Some of the biggest losers so far in the year include Barclays down 20 percent to 4,8 cents. The bank is currently in a transition period following its acquisition by FMB of Malawi. There has since been change of management at the company with former MD George Guvamatanga having left and replaced by former chief finance officer Samuel Matsekete.
Econet is also among the losers after dropping 24 percent year to date to 70,07 cents. Innscor has also come off significantly with a 19,8 percent loss to 80,25 cents by the end of the week.
BAT is another notable faller shedding 16 percent year to date to $3. Activity was, however, slightly improved with turnover for the week totalling $8,38 million against $8,26 million invested in the comparable prior week. The bulk of the funds went into Delta.
Analysts have attributed the market’s weakness to reduced currency risk concerns. Last year currency risk fears, driven by depreciating values of bank balances, saw investors piling into the stock market with invested funds reaching a record $694 million. Currency fears, however, seem to have subsided following the change in government. Illegal forex market rates for transfers have since come off from highs of 95 percent to between 45 percent and 50 percent.
The current weakness has also been attributed to market correction after most stocks reached record levels in 2017. The ZSE rallied last year and closed the year having gained by more than 130 percent. The start of the year has however been different with the market closing in red in 11 out of the 14 trading days for the year.
Article Source: The Herald