Policy issues to impact on ZSE

Stock Exchange to varying degrees, depending on their characteristics.
First was the Indigenisation Indaba. Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere, who was the guest of honour, threw out the proposal by mining companies to have empowerment credits used as part fulfilment of the 51 percent stake which foreign-owned firms are required to localise.
Mining firms had proposed to directly cede 26 percent stake to indigenous Zimbabweans while 25 percent would be covered by social investments.
The minister also indicated that they had received proposals from the sectoral committee on manufacturing but still insisted that Government would not review localisation of 51 percent shareholding.
Thus the negative perception of the empowerment policies is expected to remain hovering over the heads of many foreign investors.
As long as we continue to be perceived as a country that does not respect property rights, investor confidence will remain dampened.
Foreign investor participation on the bourse has been a key value-driver for listed equities since the beginning of dollarisation. However, the market has experienced foreign investor flight after the announcement of the indigenisation laws which may affect foreign direct investment.
Then there was the Mid-Term Budget Review Statement by Finance Minister Tendai Biti whose announcements might favour some few counters.
Stocks such as Cairns, National Foods and Aico will certainly benefit from the re-introduction of duty on some products they produce.
Minister Biti re-introduced duty on products such as cooking oil and maize.
Away from policy pressures on listed counters, we are likely to see value appreciation in some counters on the back of good financial results.
Some counters have indicated improved business in their trading updates.
For instance, OK revenue for three months to June was up 56 percent to US$89 million due to strong capital injection from Investec. Chief executive Mr Willard Zireva said its recent acquisition of Makro, now OK Mart, contributed 8,3 percent to total revenues.
Pelhams achieved US$3 million during the three months to June, representing a 3 percent increase compared to three months to March.
Sales during the period under review amounted to 35,4 percent of the total turnover of the previous year and were 131 percent above sales for the same quarter in the previous year. An increase in sales was attributed to increased stocking countrywide. The company said it is intending to raise US$5 million through a rights offer.
Retail counters, among them Edgars, OK, Pelhams, Truworths and TN, could also benefit from the recent salary increment of civil servants.
Stocks Review
Marginal gains recorded during the last two trading sessions of the week failed to offset earlier losses as the industrial index declined 1,6 percent to 163,69 points compared to the previous week ended on May 22.
The mining index was marginally higher at 160,17 after gaining 0,07 percent.
Weekly turnover came in at US$8,48 million from about 125 million shares.
Delta was the most liquid counter with weekly revenue of US$1,43 million. Aico came in second at US$1,23 million. African Sun revenue at US$1,19 million was a result of deposal of about 78 million shares which were previously owned by a management consortium.
After trades on Friday, Delta – the biggest company in terms of capitalisation – gained US3c to US80c after announcing plans to build a multimillion-dollar lager bottling plant. In the three months to June, Delta recorded a 43 percent increase in revenue to US$144 million due to strong demand for beverages. Volumes increased 27 percent to 1,7 million hectoliters.
Seed Co advanced US1,4c to US128c.
Seed uptake is expected to increase during the summer season after Minister Biti announced a financial package for input procurement.
OK Zimbabwe was up US0,50c to US11c while Dairibord and Pioneer both increased by US0,30c to US26,30c respectively.
On the downward side was Econet and Radar which lost US20c apiece to close at US420c and US25c. TPH retreated US4c to US12c, Fidelity Life dropped US2,6c to US11,41c while Phoenix and TA shed a US1c each to trade at US2c and US14c respectively.
RioZim was marginally up at US95,01c with Falgold and Hwange unchanged at previous days’ levels. Bindura, however, retreated US0,50c to US7c.
[email protected]
or [email protected]