'ZSE to grow by 10 percent'

Published: 20 January 2014

The Zimbabwe Stock Exchange (ZSE) is expected to grow by about 10 percent this year, Lynton-Edwards Stockbrokers (Les) has predicted.

After closing 2013 with its market capitalisation 32 percent higher at $5,2 billion, Les projected the bourse to close 2014 with a net worth of $5,7 billion on the back of depressed economic activity.

The stock-broking firm believes the equities market's strong performance in 2013, could have already taken some 2014 returns.

"However, we still believe selected ZSE stocks can still experience further upside, although gains might not get to 2013 levels. While we are cognisant of the fact that top line growth will be marginal we expect selected stocks to register earnings growth on the back of improved efficiencies," said the stockbroking firm.

"Overall we think a eight to 10 percent growth in equities is undemanding," noted Les.

Last year, the local bourse which opened 2013 at $3,930 billion defied the odds to close the year at $5,2 billion despite a slow-down in the economy.

"Admittedly some stocks might have been overbought or are likely to be held back by the current economic situation. We would use corrections as buying opportunities if long term fundamentals are positive," said Les.

The advisory firm also noted that another advantage for the equities market was the growing desire by foreign investors to hold assets in Africa.

"The continent is touted to be the next growth frontier in the world. We are, however, aware that we are currently dealing with a stock market environment that is prone to macro-economic pressures, given where we are as an economy," warned Les.

Meanwhile, Zimbabwe's equities market remained soft on Friday with the industrial index continuing to fall down by 0,27 percent to close the week on 202,73 points. On the other hand, the mining index recorded an increase of 0,41 percent to close at 38,82 points — largely due to the rise in Hwange.

The risers on Friday were Ariston, which went up 20 percent to close at 0,6 cents while First Mutual Limited gained 10 percent to close at 11 cents.

CFI Holdings gained 2,86 percent to close at 3,6 cents and PPC gained 0,83 percent to close at 242 cents.

On the downside were African sun which fell 7,14 percent to close at 2,6 cents, NMB lost 2,99 percent to close at 6,5 cents while Meikles fell 2,56 percent to close at 19 cents.

Padenga eased 2,44 percent to close at eight cents and while Delta shed 0,72 percent to close at 138,99 cents.

Volumes and values traded swung in the positive direction recovering from Thursday's slump.

The former improved by 220 percent to $1,84 million while the later surpassed prior levels by 30 percent to 6,47 million shares.

- dailynews