admin“The slide represents an eight percent and 14 percent decline respectively. These levels are the lowest levels for the year so far,” said part of the report.
“Liquidity challenges and access to banking sector credit, which have constrained the recovery of the manufacturing sector, continue to weigh down on the industrial index.”
According to the report, October marked the fourth consecutive month of the slide in market capitalisation and the downside performance was attributed to the negative perception of the country as a risky investment destination.
Turnover on the local bourse was modest at 545 149 636 shares worth $38,6 million, which is the second highest since the beginning of 2011 after a turnover of 619 769 026 in July this year.
Despite low trading, participation of foreigners on the stock market increased 200 percent in October with foreign purchases rising from $7,3 million bought in September to $24,1 million bought in October 2011.
The increase could be attributed to the low value of shares, which presented compelling opportunities for foreigners.
Liquidation of stock positions by the foreigners declined from 50 087 622 shares in September 2011 to a modest 19 087 073 shares.
Meanwhile, Kingdom Financial Holdings Limited in its latest commentary said foreign investors on the local bourse fell during the year due to concerns about the Indigenisation and Economic Empowerment programme and the continued charged political environment.
“The budget did not shed light on the exact implementation time lines of the programme so that investors can have a clear picture of what to expect if they are to commit their funds in various sectors of the economy.
“The fact that the Minister (Tendai Biti) did not provide for elections, save for the referendum, left investors more worried about the political situation in the outlook period,” said KFHL.
Online Reporter