Stock market mixed in 2016

TODAY is the last day of trading on the Zimbabwe Stock Exchange this year, a day which will cap of a year that represents many things for stock market investors, as stock prices swung from one end to the other in a difficult economy.For nine months, the stock exchange saw red before some panic buying spurred by worries over the introduction of bond notes between October and December, helped investors recoup some of the losses suffered in the greater part of the year.

By end of September, the ZSE mainstream industrial index had crashed 13,83 percent to 98,96 points on the challenging economic environment.

Foreign investors, who traditionally drive the equities market were exiting the bourse on the background of cash shortages and liquidity challenges experienced in the year coupled with weak aggregate demand and reduced business confidence.

According to Finance and Economic Development Minister Patrick Chinamasa, foreign purchases in the ten months to October slumped 51 percent to $55 million compared to $111 million in the comparable period in 2015.

As a result, turnover reduced to $144,46 million representing a 29 percent decline compared to same period in the prior year.

But substantial gains that started in October helped pull both the Industrials and resources indices up, although the latter had been enjoying a bull run in the year despite fluctuations in the global prices of commodities.

The gains sustained through to December also saw a strong 37 percent gain in market capitalisation to $4,04 billion from January’s $2,94 billion pre and post introduction of the bond notes.The bond notes were introduced to the market on the 28th of November and will be released into the economy in sympathy with export receipts through normal banking channels up to a maximum ceiling of the facility of $200 million.

This year, the mainstream Industrials Index gained 27 percent to 145 levels from January opening 114 levels on gains in both heavy cap counters and mid tiers. This helped the ZSE become the best performer in the region for the year, according to African Financials.

The biggest company by market capitalisation, Delta, added 24 percent of value to 88 cents. But the beverages maker was once shaken following uncertainties that came after Coca-Cola Company announced its intentions to terminate a bottler’s agreement with the Delta.

Telecoms giant, Econet rose 42 percent to 30 cents while diversified industrial conglomerate added 68 percent to 49cents.

Cigarette manufacturer British American Tobacco gained increased 37 percent to $16,75 as it remains the most expensive stock on the bourse.

General beltings was the highest riser of the year after it surged 700 percent to 0,8 cents followed by ART Corporation which rose 510 percent to 6,50 cents.

Other top gains were recorded in nickel miner, Bindura which rose 161 percent to 4 cents helping push the resources index to close the year at 58 levels, representing a 229 percent increase.

On the losing side were cement producer PPC which weakened 50 percent to 50 cents. Other losses were recorded in Medtech which closed the year 50 percent weaker to 0,02 cents while Border Timbers succumbed to a 49 percent loss to 20 cents.

Hospitality group, Africa Sun was among the losers of 2016 easing by 29 percent to 1,2 cents.

On a positive note, the year saw insurance giant Old Mutual became the first company to list on the Alternative Trading Platform, on December 1, listing 107 847 of its B Class shares.

The ATP is a lower securities exchange, developed to facilitate the trading of securities not listed on the main bourse, the ZSE, for instance employee empowerment schemes and community share ownership trusts.

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