Stocks value declines on the bourse

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THE total value of shares traded on the Zimbabwe Stock Exchange (ZSE) declined by 14,4 percent to $466,6 million during the third quarter of the year, from $545,5 million recorded during second quarter due to a drop in foreign investors participation.
Foreign investors accounted for 20,1 percent of the total value traded compared to 37,9 percent during the period under review.
In a recent report, local equities firm, Old Mutual Securities (OMSEC) said a persistent shortage of foreign currency had weakened foreign participation on the local bourse.
“The continued decline in foreign investor activity on the ZSE can be attributed to foreign currency shortages that have made disinvestment from the ZSE unnecessarily lengthy for foreign investor participants,” OMSEC said.

During the same period, the ZSE’s main industrial index added 13,32 percent, whilst the mining index firmed 24,48 percent.
For the mining index, Falcon gold’s suspension from trading on the ZSE was lifted on September 24, however Hwange Colliery remained suspended.
PPC led the gainers on the industrial index during the period with a return of 165,5 percent followed by Proplastics at 84,21 percent.
Edgars topped the losers shedding 23,96 percent followed by sector peer Truworths which had a negative return of 16,18 percent.
“The relatively subdued performance of both indices in real terms was hampered by reduced liquidity for the greater part of the quarter as government efforts to tighten money supply were in force. So notwithstanding the highly inflationary environment during the period, equity sector returns remained comparatively low,” said OMSEC.
OMSEC said business conditions have largely remained difficult owing to the sustained shortages of foreign currency, high inflation, declining demand and policy uncertainty.
Cost push inflation was the theme for most ZSE listed companies whose revenues were on an upward trend in sync with inflationary developments.
However, published financial results for the first half of 2019 have shown sales volume shrink for most consumer sector companies whose markets are largely local.
The cost base for manufacturing companies remained high given poor supplies and or unavailability of power, water and transport infrastructure.
The firm said companies that had access to foreign markets and or earned foreign currency revenue performed well though interpreting the financial results was made difficult due to the currency reforms that made comparability of financial performance difficult.
The banking sector remained largely profitable in nominal terms buttressed by the increased use of e-channels and electronic money transfers by the public in the absence of sufficient physical cash.
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