Maket capitalisation on the Zimbabwe Stock Exchange (ZSE) fell by 0,66% in January 2015 to close at a total market capitalisation of US$4,72 billion against a backdrop of weakness in the mining index.
According to the Equity research monthly snapshot released by IH securities last week, the mining index plunged 18,94% to 58.13 with Bindura declining by 21,88% in a month.
The industrial index rose 1,30% to 164,90 on the back of gains in Delta and Innscor of 8,92 and 2,70% respectively.
In the month of January the most significant gains were recorded by Truworths 60,00%, Zimre Property Investments (ZPI) 57,14 % ZB financial holdings 38,89%, Barclays 37,25% and OK Zimbabwe up 21,74%.
Notable losses were seen in Radar, Masimba, Medtech and African sun which tumbled by 42,86%, 34,78%, 33,33% and 16,67 respectively.
Turnover fell 44,20% in January to US$15,29 million recording daily average trades of US$0,96 million.
The most significant contributions to total value were Econet (31,40%), Delta (25,03) and Innscor (16,23%) .
IH securities says that deflationary pressures witnessed in 2014 will likely persist this year with the rand likely to soften further whilst oil prices trend lower.
The equity research firm noted that in the absence of meaningful and visible catalysts, indications point to sustained pressure on consumer demand and continued liquidity constraints in 2015.
“As a result we anticipate corporate earnings to remain weak going forward,particularly in H1 (first half of the year). We expect run rates to remain under significant pressure this year, notwithstanding the base effect from poor 2014 earnings that may translate to relatively lower declines,” said IH securities.
The IH report notes that though the Government has projected a 3,2% gross domestic product growth in 2015 there was significant downside risks to government forecasts.
The risks emanated from adverse weather conditions, funding shortages and depressed commodity prices, likely to result in under performance in the Zimbabwe’s key mining and agricultural sectors.
IH notes that the largest impediment to growth remains ingrained in policy inertia and lack of a compromise solution to the indigenisation policy.
“It is our view that the elective congress now behind us and the president having finalised the structure of the presidium and politburo, some element of stability may begin to pervade the party, allowing succession politics to take a backseat to the economy,” IH says in a report.