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Harare- Zimbabwe’s equities market had a dismal performance in the first half of 2015, with 35 of the 64 listed counters closing in the red.
By the close of trading on June 30, the main industrials index on the Zimbabwe Stock Exchange (ZSE) was down 8.84% from the year’s opening levels to 148.40 points - a level last seen on December 19 2012, when it closed at 148.12 points.
READ: Zim bourse drops to 2012 levels
The overall market capitalisation was also in the red, dropping 8.61% to US$3.86bn in the period under review from $4.2bn at the close of trading in 2014.
Year-on-year, the ZSE’s market capitalisation has lost close to $1bn in value. By end of June 2014 the market capitalisation was at $4.8bn but since went down to as low as $3.8bn by end of June 2015.
A total of 35 stocks closed in the red, with at least 30 of these recording a double-digit drop. A total 16 counters, however, recorded gains.
Turnover takes a tumble
Turnover for the period under review dropped a massive 41.69% to $136.7m against $234.4m in the prior comparative year.
A research note released by a local stockbroking firm said foreign participation declined by 52.46% with foreigners buying $70.5m worth of shares, down from $148.3m that had been invested in the prior comparative year. It was however a zero sum game as foreigners also sold shares worth $69.1m.
The brokerage firm said the outcome is to be expected in the wake of reduced revenues and losses reported by the listed companies during the period under review.
Analysts said the outcome was a true reflection of the situation on the ground, characterised by a poor agricultural season that saw maize production coming down by 49%.
The 2015 tobacco season was also a difficult one as the crop was affected by heavy rains and drought which resulted in low yields.
READ: Worst to come for Zim as nature comes into play
The banking sector was also fragile, registering a decline in aggregate net profit to $4.02m for the first quarter of 2015 from $22.4m in the comparable year-ago period.
“We do not expect better performance from our markets as long as the country fails to holistically address issues to do with policy consistency, ease of doing business, indigenisation and economic empowerment laws, attraction of foreign direct investment and cost of funding, among others things,” said an analyst.
