ZSE liquidity falls 39pc

LIQUIDITY on the Zimbabwe Stock Exchange has dropped continuously since March, plunging 39 percent for the six months to July 2015, with most heavyweight stocks taking major knocks. The latest statistics from the stock market show that liquidity of trades on the bourse totalled $153,66 million between January and July this year against $252,97 million during the same period last year.

ZSE registered a 32 percent dip in value traded in the first six months of the year, as most heavyweight stocks also registered declines in volumes.

Figures from ZSE valued at $136,72 million were traded between January and June from $200 million in the same period in 2014.

Liquidity on the bourse opened this year on the lower side at $16,06 million in January against $63,72 million in 2014, but at $34,78 million this year it outperformed February 2014 out-turn of $25,65 million.

Among the major stocks that took a knock in the period since January were leading brewer Delta Corporation, which shed 36 percent of value traded in 2014 to about $43,9 million.

Mobile telecoms giant Econet Wireless tumbled 32 percent to $37,8 million against $55,5 million in the first six months of last year. Usually, Econet and Delta dominate trades value and volumes on ZSE.

Another bellwether stock, Innscor Africa, was an exception after registering 10 percent growth in liquidity after value traded went up to $12,2 million in the 2015 first half from $11,1 million the prior year.

But as the case with Delta

and Econet, seed producing giant Seed Co saw liquidity in trades for

its shares taking an 84 percent knock to $7,2 million from $45 million in 2014.

Liquidity in CBZ Holdings trades fell 70 percent to $2,9 million from $9,7 million in 2014 while the value of trades in BAT Zimbabwe shares retreated 39 percent to $3,9 million from $6,5 million in 2014.

Trading on the ZSE has since dollarisation been dominated by foreign buyers as local investors were constrained by tight liquidity enveloping the entire economy due to the difficult economic conditions.

While the margins between foreign buys and sale has been marginal since the beginning of the year, the total value of trades has drastically come down from a peak of $52 million in February to $17 million.

The liquidity situation has remained tight in the economy due to low productivity in virtually most sectors of the economy and the unfettered increase in imports in

an economy in which the greenback is the major currency.

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