Heavyweight counters record losses

due to losses in heavyweight counters.
The market has been in negative territory for the whole month due to the effects of mixed financial results and trading updates that were released by listed entities.
A number of foreign companies have failed to comply with the country’s empowerment laws, thereby sending jitters on the market as they risk losing their operating licences.
On Friday, insurance giant Old Mutual reversed Thursday’s US4c gain to trade at US150c and Econet shed US2,99c to close at US417,01c. Pioneer and TA both lost a cent to US9c and US11c respectively while CBZ and Dairibord were down US0,50c to close at US14c and US21,50c respectively.
The losses were partially offset by gains in NTS, which added US0,89c to trade at US4,39c, FBCH rose US0,40c to US7c and Colcom was up US0,11c at US40,11c. The resources index gained 1,38 percent to close at 162,31 points mainly due to Bindura, which rose by US1,50c to US6c.
Falgold, Hwange and Riozim were unchanged at US4c, US60,10c and US90c respectively. The mining index gained 0,59 percent compared to the previous week.
There have not been any major changes on the market since January despite blue chips and preferred medium counters witnessing steadfast growth in earnings in the first seven months of the year with the industrials maintaining resilience after gaining eight percent to 163,69 points at the end of last month.
But the resources index has continued to take a dip on the back of regulatory constraints envisaged in the Indigenisation and Empowerment Act against huge recapitalisation requirements by the sector.
During the past seven months, the mining index has lost 20 percent to close at 160,17 points. A report by a local securities firm noted that quarter on quarter, market turnover on the bourse in the second quarter fell by 8 percent to US$107 million against US$116 million realised in the first quarter of the year as liquidity constraints continued to persist.
At the end of the period under review total market turnover stood at US$275 million up 25 percent on prior year. The firm said this was buoyed by turnovers achieved for the consecutive months of June and July.
Foreign buyers have continued to show their dominance on the market averaging 69 percent in both market sales and purchases for the period. During the period, foreign purchases accounted for US$112 million of turnover while foreign sales amounted to US$77 million of all sales on the ZSE.
Over the same period last year, foreign portfolios had only accounted for 32 percent of the market transactions. A total of US$20 million worth of block trades were moved in the second quarter, a figure 25 percent lower in the first quarter traded volumes.
About 36 percent of block trades undertaken were in telecommunications giant Econet, while 17 percent were in beverages company, Delta. During this period a total of 2,7 billion shares changed hands on the market with 33 percent representing purchases by foreign investors.
Market capitalisation peaked at an all-time high of US$4,27 billion by the end of June but retreated to US$4,17 billion at the end of last month due to a 2 percent decline triggered by losses in some heavyweight counters.
Traditional top 12 counters with the exception of OK Zimbabwe, which was elevated to the elite group on strong earnings, knocking out struggling Meikles now ranked number 13, accounted for the bulk of the market capitalisation. The retail sector extended its lead on the performance board by 84 percent on the back of strong earnings from OK Zimbabwe, Truworths and Edgars. Property, tourism, manufacturing and insurance industries were also impressive while the agro-industries continued to exhibit stability.
Fundamentals have continued to filter through into sector and individual company performances on the local bourse with sectors and companies that have managed to revert back to core business being rewarded.
Resultantly, the top five movers were dominated by the retail, insurance and manufac- turing concerns in line with sector performances.
Topping the list of risers was Fidelity buoyed primarily by the resuscitation of the life assurance business. Liquidity constrained counters in dire need of capitalisation characterised the shakers for the period led by pharmaceutical concern Caps.