Business Reporter
THE value of shares traded on the Zimbabwe Stock Exchange hands in the period to November is 5,3 percent ahead of those traded during the same period last year, riding on big deals concluded earlier in the year.
Statistics from the ZSE showed that shares worth just over $423 million exchanged hands in the period to November this year compared to the same period last year.
A total of 2,7 billion shares have been traded since January this year against 2,5 billion shares purchased or sold over the same period last year.
About $273 million worth of the shares were bought by foreign investors, significantly higher when compared to the $256 million bought in 2013.
The ZSE statistics also show that despite the poor performance of the economy $153 million shares were sold as foreign investors adjusted or exited the market.
Figures for last year show that, by value, foreign investors shifted positions more last year than the same period this year, with $163 million shares sold in the first eleven months.
By volume, at about 1 billion shares foreign investors bought significantly more shares this year than last year when the investors purchased about 718 million shares.
However, the cash rich foreigners; who are dominating the bourse, sold 794 million shares compared to 576 million shares they relinquished by November this year.
But market capitalisation statistics show that the overall value of shares on the ZSE declined from $5,5 billion in November 2013 to $4,5 billion at the same stage this year.
Economic analysts said while the domestic market appeared to have done well in terms of the value and value of shares, it has been worse on return to investors.
This is because Zimbabwe’s economy continues to be weighed down by liquidity crisis, high cost of finance, inefficiency of old equipment and machinery and low priced imports.
Analysts attributed the growth in value and volume of shares largely to the huge transactions in financial services group ABC Holdings and seed producer, SEEDCO.
“The apparent good performance is a result of the two big transactions by SeedCo and BancABC. Take out the two and compare; you will see a significant decline.
“If you take out the two large transactions you will notice quite a significant decline in value and turnover,” said a Harare analyst who did not want to be named.
Nonetheless, he said, the investors took equity in local firms taking advantage of the discounted prices at a time when most investors are ‘fearful’ of investing in Zimbabwe.
Another analyst also attributed the growth in value and volume to the large transactions in ABC, SeedCo and TA among others, saying otherwise the growth was superficial.
Former Barclays Plc managing director Bob Diamond and his Ugandan billionaire partner Ashish Thakar, through Atlas Mara acquired 98 percent of ABC Holdings.
French seed giant Group Limagrain, the largest seed and plant breeding company in the European Union, invested up to US$60 million for a 28 percent stake in SeedCo.
Investment Holding firm Masawara is in the process of acquiring TA minorities, with half the shareholders having accepted, and hoped to won 75 percent by November.
The analyst said in real terms, the market had performed worse than last year at this stage in line with deteriorating performance of the domestic economy, especially this year.
He said that this reflected in revenue decline in most bell weather stocks such as Delta, Econet, OK and Innscor favoured by investors, especially the foreign buyers.
“In the past few years, these companies have done well growing ahead of gross domestic product.
“But this year their revenues were below GDP,” the analyst said.
“Investors look at companies that are able to perform ahead of inflation and GDP. Other countries in the region have been growing at an average of 5 percent.”
Yet most local firms, the analyst said, failed to beat the 3,1 percent rate that Finance and Economic Development Minister Patrick Chinamasa projected for this year.