Investors take a back seat on ZSE

Published: 05 July 2013

THE value of shares traded on the Zimbabwe Stock Exchange in June (2013) plunged 35 percent to US$25,6 million compared to shares traded the prior month.

Analysts contend investors have started taking positions ahead of harmonised elections set for the end of this month with the market seen trading sideways.

In its June monthly market snapshot equities research firm IH Securities said the month marked a subdued ending to the first half with the market cap declining.

"We believe the announcement of an election date, being 31 July 2013, or assuming an extension, 14 August, caused some softening with light profit taking occurring particularly in liquid names," the equities firm said.

"Turnover fell by a significant 35,13 percent to US$25,62million in June, after recording some improvement in May; average daily value traded declined by 28,64 percent to US$$1,28million," IH Securities said.

Investors across the world tend to sit on the fence ahead of an election until they get an idea of the policies the incoming Government would bring.

"We anticipate that the market will largely trade sideways in this season as we await both the election process and outcome," IH Securities said this week.

Beverages manufacturer Delta Corporation dominated the trading accounting for more than half of the value shares traded at US$12,87 million.

Financial group FBC Holdings was a distant second in terms of shares sold coming in at US$7,49 million followed by Econet at US$5,87 million.

IH Securities said despite the beginning of the interim reporting season for companies with December year ends stress in run run-rates would continue. The equities firm cited persistent liquidity challenges for its assertion.

The market however reversed gains made in the prior month of May, with total market capitalisation declining 2,15 percent to close June at US$5,99bn (plus 36, 64 percent year to date), including shares on foreign registers.

The industrial index eased 0,08 percent as all heavyweights closed the month in the red; Econet (US140c) lost 5,71 percent, whilst Delta (US66c)and Innscor (US91,02c) gave up 4,12 percent and 1,07 percent respectively.

- herald