Last quarter surge lifts Zimbabwe equities, but challenges remain

National Foods and BAT were up 37.41 percent and 25 percent respectively, while Seedco advanced 20.6 percent to 101 cents.

CBZ, however lost 4.46 percent to close at 10.5 cents in the year under review.

On the top five gainers, GB Holdings led the movers pack, advancing 700 percent in the year to 0.08 cent. ART and Riozim put up 510 percent and 188.46 percent to 6.1 cents and 30 cents respectively. Bindura and Colcom also landed in the top five after adding 163.16 percent and 117.65 percent in the year to close at 4 cents and 37 cents respectively.

Medtech was the worst performer in the year after shedding 50 percent to close at 0.02 cent. Cafca, PPC and NTS also lost 49.88 percent, 45 percent and 35.29 percent in that order. Ariston eased 32.69 percent to close at 0.35 cent.

On the mining space, Bindura and Riozim pushed the resource index high after their share prices grew 163.16 percent and 188.46 percent respectively. Falgold also added 20 percent to 0.60 cents. However, Hwange was flat at 3 cents.

Foreigners remained the dominant participants on the local bourse with 52 percent of the trades in 2016 being foreign trades, down from the 56 percent recorded in 2015.

Foreigners were net sellers in the year, having bought shares worth $60.264 million ($125.338 million in 2015) and sold shares worth $140.33 million ($129.66 million in 2015), reflecting diminishing appetite for local shares.

The bourse also recorded the least foreign purchases since 2009, showing its weak capacity to attract foreign portfolio flows, a situation which the Minister of Finance, Patrick Chinamasa said is worrisome. Chinamasa has urged the government to revisit the ZSE transaction costs, which he said are too high relative to other regional stock exchanges.

The net outflows witnessed on the local bourse continue to put pressure on the bank nostro accounts at a time when the economy is faced with cash challenges.

The introduction of bond notes remain the driving force behind the equities gains, with the economy seen performing poorly this year. Chinamasa projected a GDP growth of 0.6 percent for 2016 — half of his earlier projection of 1,2 percent — and 1,7 percent for 2017.

His projection remains optimistic, with the International Monetary Fund projecting a -0.3 percent growth for 2016 and -2.5 percent in 2017 in the absence of reforms and new funding to stimulate the economy.

Manufacturing capacity is seen below 40 percent despite a spike reported for some industries following a ban on imports in June as industry deals with many challenges, chief among them critical shortage of liquidity, power outages.- The Source

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