From Business Day
The Zimbabwe Stock Exchange (ZSE) has responded positively to the announcement of a new cabinet by President Robert Mugabe this week, gaining 2.82 percent — a start contrast to its 11 percent fall after the July 31 election results were announced last month.
The country’s oldest stockbroker, Imara Edwards Securities, said politics were the driving force on the ZSE. It noted that “the recent election victory of Mr Mugabe may have led to a sell-off by some, but simultaneously created a value opportunity for others. Ins and outs by foreign investors created a record month for trading volumes in the market”.
Commentators noted that several business-minded ministers and technocrats were part of the mix. This sent some re-assuring signals”.
Imara Edwards executive director Tino Kambasha said that the fall of the ZSE last month was a correction that had been in the offing for some months.
“It seems South African-based investors were happy to sell and take profits. Certain late-comers who missed out — largely Europeans and Americans — were eager to buy at new levels, seeing the potential for long-term gains as the country’s underlying economic fundamentals remain positive,” he said.
Kambasha said trading volumes on the ZSE could remain at elevated levels “for a while”.
“Domestic investors stayed on the sidelines in August, but in September we saw the first indications of buying by local institutions. They were rewarded by some early gains,” he said.
Last month some blue-chip counters reached apparently bargain levels. Barclays Bank was down 47 percent by month-end, British America Tobacco Zimbabwe was down 30 percent, Delta Beverages and Econet Wireless fell by 27 percent and Innscor shed 22 percent of its market capitalisation. They have now become bullish.
Read more at Business Day