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Profit Taking Stymies bull run

THE mini-bull run at the Zimbabwe Stock Exchange was last week slowed down by profit-taking across the board.

It was another week of positive trade on the local bourse with deals worth US$11,5 million having been made during the week.
Telecommunications giant Econet accounted for almost half, on US$5,5 million, of the deals which were made on the local bourse during the week.
There were gains recorded by both the mining and the dual listed counters during the week.
The mining Index recorded gains for six straight days to close at 251,62 points.
Analysts have predicted that the heavily capitalised counters will be the driving force behind the bourse.
“Heavyweight counters (Econet, Delta, Innscor) controlling 43% of the market will determine the direction of the market to year end.
“The market ended the week in the green with the industrial and mining indices advancing 3% and 16% to close the week at 161,81 points and 251,62 points respectively,” said analysts from Afre Corporation.
While Econet accounted for the largest chunk of the trade which took place during the week, there were also movements shown by the small cap counters such as Zeco which led the risers.
Zeco gained 0,3 cents to close at 0,8 cents while NMB gained 0,2c to close at 0,7c.
Mining entity Falgold, advanced 3c to close at 11c and this was mainly a result of the firming gold prices on the international market which saw the metal gain 5% to close the week at $1,051/oz.
Firming metal prices have also seen Bindura rising by 35% to close the week at 27c as nickel prices surged by 9% to close the week at $19 175 per tonne.
“Small caps and speculative counters, Medtech, Truworths and Celsys led the fallers, shedding 0,05c, 0,7c and 0,06c to close the week at 0,05c, 1c and 0,1c respectively.
“We are optimistic that the market capitalisation for the year 2009 will hover between US$4,3 and US$4,4 billion in line with the national target 40-60 % capacity utilisation,” added Afre Corporation analysts.
The local bourse was on the rise since it resumed trade on February 19, but there was a slowing down in June and July which was attributed to the lack of liquidity on the market.
Analysts have predicted that the current trend will continue on the bourse as result of the performance of the diversified and heavily capitalised counters.
“Performance is likely to be driven by Hippo, Natfoods, Delta and AICO — all currently trading below their one year peak prices while Econet and Innscor are likely to record further gains.
“However, investors may reap good returns by selecting second tier stocks in particular strategic sectors like retail,” said the analysts from Afre Corporation.
Investors would continue to choose the stock exchange as the most viable option in the absence of the money market.
This is one of the reasons why the market remains optimistic about the performance of the ZSE.


Leonard Makombe

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