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BizDay Zimbabwe

Zimbabwe Stock Exchange off economic downturn

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THE Zimbabwe Stock Exchange market capitalisation continues on a recovery path since the formation of the new government as investors renew their interest on the bourse despite underperformance of key economic sectors, official figures have shown.

Market capitalisation measures the total value of the issued shares of a publicly traded company. The market capitalisation reached $6 billion in July this year to retreat to $4,6 billion in August this year $5,1 billion in September, $5,4 billion in October.

Experts attribute the rebound of the exchange to Zanu PF’s climbdown on the indigenisation and empowerment policy compelling foreign-owned companies to sell controlling stakes to locals. For the first two weeks of this month the value of shares trading on the local bourse rose to $5,5 billion.

By November 14, ZSE heavyweight, Delta was leading the pack with a total market capitalisation of $1,8 billion, followed by Econet at $554,6 million, Innscor $470 million, OK Zimbabwe $288 million, British America Tobacco $258 million, Hippo valley $222 million, Seed Co $175 million, Old Mutual $151 million and National Foods $147 million.

Consumer-facing industries are dominating the top ten of the local bourse companies in terms of market capitalisation.

The total turnover for the first two weeks of this month stood at $17 631 851 while volumes were 749 509 72 according to statistics from ZSE. The local bourse market capitalisation grew from $1,67 billion in 2009 to $5 billion by the end of 2012. According to the quarterly market review for the third quarter of this year MMC Capital said despite the negative political environment, total trades in the third quarter were 32% higher at $134m from the prior quarter’s $102 million.

“Offshore investors commanded 50,5% of the trades in Q3’13 up from the 27% achieved in Q2’13. Volumes went up 58% to 831 million shares from the 525,7 million shares traded in the second quarter,” the report has shown.

MMC Capital said the average monthly turnover improved by 32 percentage points from the second quarter’s average of $34 million to $44,8 million. According to the research firm August was the best month in as far as monthly turnover is concerned recording $54 million buoyed by foreign investor purchases while September recorded the lowest value traded of $37,7 million as investors panicked following the delay on Cabinet appointments.

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