PHILLIMON MHLANGA
The Zimbabwe Stock Exchange (ZSE) lost a combined fortune amounting to ZWL$54bn in two weeks to yesterday with uncertainties over the central bank’s decision to tighten liquidity in the market being a possible decisive factor behind the bearish trend, Business Times can report.
The decline is the sharpest in years, rattling the local bourse, once-a-go-to-destination for companies seeking cheap funding.
Official data also shows that foreigners have been cashing out of the local bourse.
The selloff, which has accelerated since the beginning of this month, means that the local bourse remains fragile, with the equity exposure now clearly in an underweight position.
ZSE’s total market value stood at ZWL$543bn at the end of March.
But, by yesterday, it had slid to ZWL$489bn dragged by losses across indices.
The primary indicator, the ZSE All Share index went down 1.18% to close at 1 196.37 points while the Top 10 Index shed 1.77% to 2 411.78.
The Top 15 Index shed 1.46% to 2 739.64 points while the mid cap went down 0.33% to 10 090.20 points. Small caps gained 1.08% to close at 47 589.82 points.
Top losers were Dairibord Zimbabwe which lost 14.10%, Art (8.80%), Edgars (6.53% and Meikles (4.33%).
“Firstly, the stocks were in overvalued territory, Now, it’s a market correction. There is also a liquidity issue where the central bank is managing liquidity. Liquidity is tight at the moment in the market, an investment expert, who requested anonymity, told Business Times yesterday.
“Also, we have seen a lot of foreign sellers. It’s attractive at the moment because they can have a decent earning.”
However, African Sun, National Tyre Services, Mashonaland Holdings and ZB Financial Holdings were top risers.
The market, analysts, said is likely to remain high.
“The market will remain elevated. Liquidity will improve,” said another analyst who also refused to be named.
