NEW Africa Securities managing director Ndodana Mguquka has been appointed chairman of ZSE’s management committee. He takes over from Bart Mswaka of Renaissance Securities. Mswaka now deputises Mguquka.
The purpose of the committee is to enforce listing requirements on all listed companies, manage and control the affairs of the ZSE, settle disputes between members and examine all applications for listing on the bourse. The ZSE committee among other functions also has the power to grant, review suspend or terminate listings subject to the listings requirements.
Mguquka yesterday said he was geared to revive the ZSE by attracting big players on the market.
He said: “As the new executive committee, we are looking forward to reviving the ZSE. At the moment there are a lot of issues that need to be sorted out, particularly the quality of our listings. We need to improve the quality of our listings to attract foreign and local investment.
“Currently our capitalisation is just above US$3 billion and is falling but if we attract big companies to list, especially in the mining and banking sectors, we can grow the size of the market up to levels of US$10 billion.”
Finance minister Tendai Biti last week said in his Mid-Term Fiscal Policy review statement that the ZSE has largely been “low mainly due to market illiquidity in the first half of the year”.
“Foreign participation has remained subdued with investments mainly confined to portfolio restructurings. Corporate results have also failed to uplift the equity market as most corporates are still undercapitalised and also suffering from subdued demand,” Biti said.
“Of the companies that sought recapitalisation mainly through rights issues, shareholder support averaged 50% with the balance being taken over by the underwriters.”
The industrial index which started the year at a high of 156,52 had dropped to 127,46 by June 2010, whilst the mining index fell from an opening of 209,8 to 143,08.
Similarly, market capitalisation fell from US$3,97 billion in January 2010 to US$3,19 billion by end of June 2010.
The poor performance is as a result of investors pulling out their investments reflecting depressed investors’ sentiment over perceived financial risks, especially following the gazetting of the Indigenisation Regulations in January.
In particular, foreign investors’ contribution to market turnover fell from between 40-50% to an average 20% per month.
Meanwhile, stocks rose marginally on the ZSE this week following Biti’s statement.
The industrial index rose to 123,67 from last Wednesday’s 121,29 points. Mobile phone operator Econet topped the movers with a 3,01 cents gain to 468 cents with diversified group, TA Holdings up two cents to 27 cents. Dairibord, Edgars and Fidelity Life were each 0,50 cents solid at 7,70 cents, four cents and 3,50 cents respectively.
Conglomerate CFI dropped 2,50 cents to close at 15,50 cents and hotel group African Sun lost 0,30 cents to close at 2,50 cents.
Barclays shed 0,20 cents to eight cents. Cairns went down 0,09 cents to close at 2,12 cents and Hunyani eased 0,05 cents to trade at three cents.
The mining index surged to 132,98 points from 123,63 points recorded last Wednesday. This came on the back of buoyant performance in Bindura Nickel which closed at nine cents and Hwange was slightly up at 20,01 cents. Falgold and Riozim were unchanged at three cents and 230 cents.