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In a commentary, Kingdom Financial Holdings Limited (KFHL) said returns, however, remained negative as the investment environment continued to be plagued by inconsistent Government policies and political uncertainty.
“The tempestuous banking sector conditions also heighted the uncertainties in the financial sector while liquidity challenges continued to affect listed companies both on the demand side and on the funding side.
“The industrial index declined by 9,53 percent while the mining index shed 24,83 percent to 131,96 points and 75,7 points respectively during the first half of 2012. During the same period in 2011 the industrial index had gained 10,52 percent while the mining index had lost 14,51 percent,” said he financial institution.
KFHL said foreign investors bought shares worth $124,33 million and sold shares worth $77,78 million giving a net investment of $46,55 million which exceeded the net investment for the comparable period in 2011 of $32,34 million by 44 percent.
Despite the overall poor returns on the market, the financial institution said several counters recorded significant price improvements in the first half led by Falcon Gold that rose by 158,3 percent to 15,5 cents.
The gold mining firm has been on a recovery path from a loss in 2009 to profitability in 2011 on the back of increased gold production and firming gold prices.
Another high performer in the first half was General Beltings which rose 130,8 percent to 0,3 cents despite a loss of $1,2 million for the second consecutive year in 2011.
Afre and Zeco made 100 percent gains during the same period notably on the back of the board changes that happened at Afre while for Zeco, the market exhibited irrational exuberance.
Ariston completed the top five gainers with a 77,8 percent to 1,6 cents following a successful rights issue that saw the company being taken over by Afrifresh of South Africa.
KFHL reported that on the other hand Chemco lost 95 percent to 0,5 cents becoming the worst performer in the first half of the year when a series of losses forced major shareholder, TSL to propose restructuring and delisting of the company from the Zimbabwe Stock Exchange (ZSE).
Interfin lost 77,7 percent by the time it was suspended from trading on the ZSE on 11 June 2012.
“At the time of its suspension, investors had become aware of its non performing loans and liquidity challenges,” said KFHL.
Border Timbers lost 71,7 percent to 13 cents as the memory of the fires that destroyed part of its plantations and machinery in 2011 appeared to have stuck in investors’ minds.
“Given the dull performance of the market in the first half, one would not expect much to change in the second half but we are optimistic that the second half will be much better. The major reason for the positive outlook is that the market has already factored in most of the negativities in the current prices and going forward the recovery should come from new earnings and continued liquidity improvement,” said KFHL.
Online Reporter