ZSE turnover down 15% in 2016

The value of shares that exchanged hands on the Zimbabwe Stock Exchange (ZSE) was down 15% in 2016 to $193 912 389, despite a late rally in the last quarter of the year, latest data shows.

BY BUSINESS REPORTER

This is the lowest turnover since the economy adopted the multicurrency regime in 2009 and eats into the revenues of the country’s stockbrokers, who have found the going tough due to low trades.

In 2015 turnover was $228 626 287. The previous year, turnover was $452 865 752,17. The highest turnover was $485 719 802,03 recorded in 2013.

The industrial index closed the year at 144,53 points up 26,28% from 2015. The mining index raced to 58,51 points, which was up 119,88% from the 2015 figures.

Average monthly turnover was $13 million in the first nine months of the year, before firming up in the last quarter of 2016. Turnover rose to $23 200 856 in October, $23 460 016 in November and closed the year at $25 996 713 in December.

The rally was fuelled by the introduction of bond notes, which saw investors shifting to equities as they were uncertain of the impact of the currency which was introduced at the end of November. This saw investors moving assets near to cash to equities.

It also came on the back of the underperformance of companies due to the harsh economic environment, resulting in reduced profits. The few companies that declared dividends faced challenges in repatriating the dividends to foreign shareholders. The companies struggled to make foreign payments, which affected relations with suppliers.

In November, Delta said it owed shareholders and creditors at least $30 million. In a statement accompanying the company’s half-year results for the period ended August 31, 2016, Econet board chairman, James Myers said the depletion of the country’s foreign currency reserves had made it difficult for all companies to make payments to foreign suppliers of capital, goods and services.

“As a result, we have been unable to make certain debt repayments on time, notwithstanding that cash was available in our local bank accounts. This situation is expected to persist. We have engaged our lenders and continue to explore mutually acceptable solutions,” he said.

Meanwhile, the benchmark industrial index yesterday opened the year 0,51% firmer to close at 145,27 points driven by gains in heavy caps Delta and Old Mutual, First Mutual and National Tyre Service (NTS).

First Mutual advanced 7,1% to close at 4,40 cents at yesterday’s trade. NTS was up to 1,15 cents from 1,10 cents.

Delta was up 1,69% to 90 cents. Old Mutual traded at 349,49 cents from the previous 349,21. The mining index was unchanged at 58,51 points.

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