via Faltering economy hits ZSE – NewsDay Zimbabwe April 8, 2015
The value of shares that exchanged hands on the Zimbabwe Stock Exchange (ZSE) dipped 40% in the first quarter of 2015 to $69 742 238,45 as the bourse took a knock from the faltering economy.
BY BUSINESS REPORTER
This is the lowest value realised in the first quarter since the introduction of multi-currencies in 2009.
In the same period last year, shares worth $118 668 534,15 were sold, according to latest statistics from the bourse.
A total of 586 093 096 shares exchanged hands in the quarter down from 687 208 341 during the same period last year.
The benchmark industrial index closed the quarter at 158,22 down from 176,32 in the comparable period in 2014.
Market watchers say the events at the bourse were a mirror of the state of the economy.
“What is happening on ZSE reflects what is happening in the economy. Financial results of companies show that all is not well. A number of companies have closed while revenue growth is stymied. The economy has no money and loans for capital expenditure attract high interest which affects performance,” said a research and advisory analyst.
“You need external funding which is not forthcoming at the moment.”
In its outlook for 2015, brokerage firm MMC Capital projected the equities market to remain under pressure this year on the back of poor operating fundamentals in Zimbabwe.
“Escalating economic headwinds continue to hamper sustainable economic recovery, with liquidity constraints, faltering industry capacity utilisation and waning government revenue persisting to be the major impediments. The political dust is yet to settle as evidenced by intensifying bickering in the ruling party, Zanu PF, hence putting a damper on the upside potential of the local bourse,” MMC said.
Activities on ZSE are closely followed by investors to check on the health of the economy.
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