Published: 05 November 2013

The market closed the week with the Industrial index adding 0.1% to close at 209.86 points on the back of gains recorded in Econet +0.50c, Innscor +0.9c and Old Mutual +0.99c.

The Mining index gained 5.9% to close at 50.29 points as a result of improved bids in Hwange and Rio Zim of 14c and 35c, respectively. Special deals of 70.5 million Dawn shares at 1.3c and 29.2 million African Sun shares at 2.6c contributed significantly to weekly turnover of $6.6m.

The weekly value traded represented a 17.9% decline from the previous week on the back of 139.0m shares that exchanged hands.  The aggregate market cap closed the week at approximately $5.9bn, up 0.3% w-o-w.

The liquidity scourge continues to negatively impact the Zimbabwean economy with banks becoming increasingly cautious especially in the face of soaring bad debts, estimated at above 15%. However, the government has been advised to prioritise funding of viable companies in order to resuscitate the industry as most companies continue to close down. The Finance Minister has announced that the presentation of the 2014 National Budget has been postponed to a later date (possibly next month) as he needs more time to consult with stakeholders.

Although the economic growth has slowed down we believe that ZSE continue to offer value for long term investors off a low base coupled with the return of dividends. We advise investors to take positions in companies with strong balance sheets, dominant market share and solid management such as BATZ, Delta, Econet, Innscor, SeedCo and TSL. 
- Imara Edwards

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