Not much was presented by companies which released results for the first half of the year and in many of the cases they posted losses.
However, there was change in tone as most of the outlook summaries of the results which were released showed that there was optimism which had replaced the exasperation exhibited in the previous reporting periods.
In many cases, the companies which released results paid tribute to the stable political environment and policy initiatives though they continue to bemoan the lack of liquidity on the market.
Results released in the past month were not exciting mainly as companies reporting for the period ending June had to deal with two months (January and February) when the use of the local currency was still the official position.
This was a time when there were massive price distortions — a nightmare for business.
Now that the use of multiple currencies has taken root, companies are expected to start making reasonable profits.
For most companies, the first half of the year was a period for adjusting to the new operating environment which was characterised not only by changes in the currency but also policies.
In its report for August, Datvest Asset Management said the investor focus has shifted from asset-based valuation with latest inclination expected to centre on what the respective assets are generating for the shareholders.
“It is the deployment of various assets by management towards revenue generation that will be rewarded by the market,” Datvest said. “The mere calibration of challenges encountered over the period will not keep the capital streams flowing as investors will be delighted to see nice numbers or at least have clarity of the new business models relevant for the market.”
Whereas the use of multiple currencies has brought stability to the economy, there has been continued drop on the Zimbabwe Stock Exchange on a month on month basis.
This could be a case of the market rediscovering its real value.
The industrial index declined 7,7 % to close the month of August at 137,06 points while the mining index softened 13,37% to close the month at 192,8 points.
Total value traded for the month amounted to $39,8m down $9,7 million on the previous month’s $49,5m.
“It is very possible for one to buy into the notion that certain counters were running ahead of fundamentals in terms of earnings expectation as investors picked stocks with assumptions that traditional winners would be ahead of their game in a more stable economic environment,” Datvest said.