THE Zimbabwe Stock Exchange main industrial index has registered consecutive gains since mid- September in a demonstration of growing investor confidence in Zimbabwe. Stocks gained 1,58 percent last Friday driven by gains in Pelhams, Astra, Econet, African Sun and Barclays with only Ariston and TSL trading in the red as the honeymoon that began on September 16 persisted on the bourse. At 212,68 points, which represents a 13,2 percent gain since October 16, the industrial index has recovered the 11 percent decline due to profit taking soon after the harmonised elections resoundingly won by Zanu-PF.
A securities analyst with a leading securities company said the positive run was due to the increasing confidence of investors in Government policy after the watershed elections.
“After the election there was a bit of panic selling following the Zanu-PF victory as people did not know what policy would come or what the Government would do. But since then there has been stability and no policy discord on what people (in Government) say,” the analyst said.
“So there has been stability on that front and because of this we have seen renewed foreign buying. Outside the US where the Government has issues, people are looking somewhere to invest.”
Investment in stocks has had indirect positive impact to liquidity considering the fact that foreign investors have since dollarisation dominated trading in shares listed on the local bourse. It also means it will not be long before the positive sentiment transcends to green field productive sectors as foreign investors seek to tap into the innumerable opportunities in Zimbabwe.
Such developments would positively impact the liquidity in the economy as limited access to funding has resulted in an interest rate spike on bank loans. The shortage of affordable long-term finance has resulted in companies failing to recapitalise, raise productivity and production.
Trends on the ZSE index also mirror foreign investors’ confidence in foreign investors about Government plans on economic recovery and growth, which determines the business environment. The positive investor sentiment helped Econet to add US3c to US64c and Astra was up a cent to 5,50c. African Sun and Barclays advanced US0,10c each to trade at US2,20c and US3,60c respectively.
Old Mutual inched up US0,04c to US247,55c and Pelhams was US0,03c firmer at US0,13c. On the other hand, TSL shed a cent to settle at US33c and Ariston slipped US0,30c to close at 0,70c. On a week-on-week basis the ZSE industrial index has added 4,32 points or 2,07 percent.
Comparably, the four-stock mining index has not enjoyed as much positive gains, however losing only once between September 16 and its 52,48 point peak on October 7 before plunging. Last Friday the mining index was flat at 48,99 points. Bindura, Falgold, Hwange and Riozim were unchanged at previous levels.
Week on week the mining index was down 1,54 points or 3,05 percent.