ZSE tumbles on military action

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Underperformance of the Zimbabwe Stock Exchange and huge voids in the property sector has seen most insurance companies reducing their exposure to traditional assets

Stocks fell 7,46% on Thursday a day after the country’s military announced it had detained President Robert Mugabe and arrested high-ranking government officials the army believes are responsible for corruption and economic woes in the country.

By Chris Muronzi

The industrial index yesterday gave up further gains as investors took stock of the military intervention, which the commanders say is not a coup, to close at 487,93 points, while the mining index fell 2,69% to close at 134,4 points.

Market cap fell to US$13,8 billion while turnover more than doubled to US$31,5 million from US$13 million on Wednesday. On Wednesday, the key index fell 1,28% as investors digested the military intervention.

This comes after equities on Tuesday advanced despite rising security threats in the country.

The country’s highest ranking military General Constantine Chiwenga on Monday said the army would not hesitate to intervene if what he viewed as purges of officials with liberation credentials in the ruling Zanu PF did not stop immediately.

Delta dropped a massive 19,96% to close at US$2,54 yesterday.

Investors on Tuesday seemed to have discounted the statements, with the mainstream index gaining 0,37% to close at 534,13 points. NatFoods advanced US$0,20 to trade at US$7,30, cement manufacturer Lafarge rallied US$0,16 to close at US$1,60 while TSL advanced US$0,0795 to close at US$0,53.

Other movers were in Seed Co which gained US$0,0143 to close at US$3,22, Colcom added US$0,01 to close at US$0,73 and Innscor added US$0,0059 to close at US$1,69.

On the downside, BAT on Wednesday dropped by 7,5% to close at US$37, while PPC came off US$0,15 to close at US$3,2 while beverage manufacturer Delta was down US$0,0362 to close at US$3,1 while Econet shed US$0,0307 to close at US$1,8370, Innscor eased US$0,0309 to close at US$1.66 whilst seed producer Seed Co closed at US$3,2 following a US$0,01 decrease.

Gains were seen in TSL which added US$0,02 to close at US$0,55, CFI was up US$0,01 to close at US$0,82 whilst Padenga inched up US$0,0002 to close at US$0,81.

The resources index was flat at 138,12 points. Bindura, Falgold, Hwange and RioZim remained unchanged at US$0,05, US$0,022, US$0,038 and US$1,975 respectively.

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