ZSE hits new three-year low

HARARE - The Zimbabwe Stock Exchange (ZSE)’s benchmark industrial index declined by 5,25 percent in August 2015 and reached a three-year low of 135,43 points, owing to losses in heavyweight counters, an equities report has shown.

The industrials last traded below current levels as far back as September 3, 2012 when it traded at 132,82 points before jumping to 136,42 points the next day.

An investor alert released recently by Lynton Edwards Stockbrokers (Les) revealed that a total of 19 stocks closed in red while 13 traded positive during the month of August.

“Notable stocks to close negative were Delta down 14,58 percent to 84,99 cents. The group is currently experiencing a decline in both its volumes and revenues,” read part of the report.

In the period to June 2015, volumes declined across all lines resulting in a 10 percent drop in revenue.

The share price for OK Zimbabwe dropped 14,63 percent with the group’s net sales for the quarter to June declining by 7,5 percent on prior year mainly on account of “the macro-economic environment which continues to deteriorate as evidenced by declining consumption and continuing falling product prices.”

In the period under review, Econet Wireless Zimbabwe lost 12,52 percent to 28 cents, while Innscor dropped 5,52 percent to 59,50 cents and SeedCo shed 2,89 percent to 100 cents.

Ariston was however the month’s top faller down 60 percent to 0,2 cents.

The latest figures come as the ZSE lost more than $1,7 billion in value for the 12 months period ended August 31, 2015.

The local bourse’s market capitalisation stood at $5,2 billion in August 2014 but has been in free fall since then and is now valued at $3,5 billion, a 32,69 percent decline.

Activity on the exchange has been subdued since President Robert Mugabe won the 2013 elections under controversial circumstances and this year alone the bourse turnover declined by 47,23 percent to $172 million from $326 million traded in the eight months to August last year.

Market experts said the drop in value is to be expected as most big cap companies are struggling to sell their products amid the continued decline in disposable incomes.

“In mining all stocks closed in red on the back of weakening international commodity prices. Gold miner Falgold was down 33,33 percent to 0,4 cents, followed by Hwange down 17,07 percent to 3,4 cents, and RioZim down 14,28 percent to 12 cents. Nickel miner Bindura shed 6,66 percent to 2,8 cents,” said Les.

In the quarter to June production of nickel in concentrate at BNC went down 34 percent to 1 349 tonnes compared to 2 032 tonnes in the fourth quarter of financial year 2015 primarily due to a reduction in average head grade and recoveries.

In August, there were, however, several stocks on the upside with Meikles as the top riser after adding 49,62 percent to 12 cents amid reports that sales for the group’s retail arm have grown 15 percent in the past year.

The group is also reported to have revived its interest in chrome mining following Government’s directive to lift the ban on chrome ore exports.

Other counters that traded in the positive include CFI Holdings and NMBZ Holdings.

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