'ZSE reflects investor sentiments'

Published: 28 November 2017

THE Zimbabwe Stock Exchange (ZSE) acting chief executive officer Martin Matanda says the main bourse will in the outlook continue to reflect investors' sentiments regarding the settlement of the political issues and the confidence generated by the efforts of the incoming new leadership.

"From this experience we conclude that a major political event can have a severe impact on the market as a result of uncertainty, while information is gathered for decision making purposes," he said.

"The ZSE market valuation simply reflects the collective assessment of the market participants at the given point in time. If investor's sentiments shift, these will be reflected through price movements in line with the direction that investors believe the market should move."

Matanda's remarks come after $5 952 648 408 in shareholder value was lost on the bourse in one week since military stepped in on November 15 to arrest the deteriorating economic, social and political conditions.

The intervention forced the resignation of former President Robert Mugabe. President Emmerson Mnangagwa was sworn in on Friday.

Matanda said the finalisation of the incoming Cabinet and policy changes would determine the participation of foreign investors on ZSE.

"For local investors, participation would be dependent on solutions to the inflation fears, the currency uncertainty and elimination of multiple valuations of the currency as well as foreign currency shortages," he said.

The losing streak on the bourse was halted on Friday when Mnangagwa was sworn in with the benchmark industrial index increasing by 1,12% to 318,65 points.

Market capitalisation was up 1,08% on Friday to $9 149 537 933 as calm returned to the market.

Stockbrokers called the losses a knee jerk reaction, while Matanda described it as a market response sending the ZSE into a "sell off" mode with investors and shareholders looking to get their money out.

Meanwhile, the industrial index was 4,72% up to close at 333,68 points led by gains in Old Mutual, Econet, Delta, Seed Co, OK Zimbabwe and Zimplow.

Old Mutual advanced by $0,3919 to trade at $4,9674, Econet was up $0,1487 to $1,0355 while Delta firmed $0,1231 to close at $1,4454. Seed Co put on $0,0977 to close at $1,5685, retailer OK Zimbabwe was up $0,0280 to $0,1685 while farming implements manufacturer advanced $0,0130 to $0,0782.

Shakers were led by PPC which dropped $0,0802 to close at $1,8000, cigarette manufacturer BAT lost $0,0500 to $36,9500 and Simbisa was down by $0,0400 to $0,5000. Dairibord was $0,0345 lower at $0,1405 and Innscor eased $0,0139 to trade at $1,1053.

The mining index was unchanged at 126,63 points.
- newsday

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