admin
Business Reporter
THE announcement of a new Cabinet has had a positive impact on the performance of the Zimbabwe Stock Exchange (ZSE), economic analysts have said.A day after the announcement of a new Cabinet, trading on the local stock market on Wednesday recorded positive gains that saw the industrial index going up by 5,25 points (2,82 percent) to close at 191,14 points on the back of gains in heavyweight counters.
The mining index increased by 1,56 points (3,31 percent) to close at 48,73 points after RioZim was bid higher at 25 cents.
The ZSE market capitalisation also recorded some gains to close at $4,9 million from $4,8 million.
An economist, Mr James Wadi, said the announcement of a new Cabinet had some impact on the local stock market.
“There has been some impact in the sense that it brings some kind of certainty and provides reference regarding the ministers that business can now work with. The announcement of a new Cabinet sends positive vibes as business and investors now are able to have some engagement in issues that they might have,” he said.
He said the announcement of a new Cabinet was a major event on Zimbabwe’s stock market as investors now know the respective ministers to address their concerns.
“The positive gains recorded on the stock market do not necessarily mean that going forward the positive trend will continue.
“What will determine the trend are policies by certain ministers; this should guide the direction of the stock market and if investors believe there is ingenuity on economic policies, the stock market will respond positively,” he said.
A financial analyst with a leading banking institution, who preferred not to be named, said before the Cabinet was announced, investors were concerned about the new Minister of Indigenisation and Economic Empowerment.
“Investors were much concerned about who will be the new Minister of Indigenisation. Like what has happened, they wanted someone who is perceived to be a softer minister and is akin to deal with challenges surrounding the indigenisation programme. Investors will need a softer minister who will not be hard when they engage him.
“President Mugabe in his inauguration ceremony indicated that the indigenisation programme will have some form of flexibility. This is what the investors need,” said the financial analyst.
An economic commentator, Mr Peter Mhaka, said the performance of the bourse would be determined by the economic situation.
Online Reporter