Share growth forecast at 20 percent

of the year on the back of improved economic activity.
Giving an overview of the performance of ZSE for the period ending May 11, leading securities company Imara Securities said most results reported last year featured over 40 percent earnings growth.
“We believe that the ZSE offers tremendous upside potential, off a low base for early birds,” the company’s report said.
“The prospects of continued good earnings growth will provide further upside potential from current levels.”
Micro-economic fundamentals have recovered, showing a positive trajectory with GDP growth for last year recorded at 8,1 percent and anticipated to close the year at 9,3 percent – one of the highest in Southern Africa.
Year-on-year inflation has steadied to 2,7 percent as at April, after peaking at 6,1 percent in May last year. It was expected to close the year at about 4,8 percent.
Earnings on the local bourse are mixed, given the diversity of businesses, although the big capitalised companies have recovered swiftly.
Retail and fast moving consumer goods have succeeded, reporting strong volume growth, albeit on a low base and good pricing power.
But property counters have continued to struggle as counters outperformed in the hyperinflationary period. Their portfolios were seen as a hedge and as properties have been marked down post-dollarisation due to yields and limited transaction potential due to lack of liquidity.
Imara said local institutions were overweight in equities as a result of hyperinflation.
But this is expected to take a new dimension as local fund managers redesign their portfolio, building up on their cash position and diversifying away from overexposure to equities and fixed assets.
But this is expected to improve liquidity as local fund managers sell off their holdings.
ZSE was largely static in the previous year as the industrial index lost a marginal 0,5 percent year-on-year basis.
The market has retreated in volumes, with average daily trades easing to US$1,5 million from just below US$2 million in 2009.
Nonetheless, mainstream industrial index gained 51 percent since dollarisation. In the first quarter of the year, value traded improved to average approximately US$1,8 million a day.
Share prices on the equities de-rated due to waning investor confidence in Zimbabwe following the implementation of indigenisation policies.
Foreign investor participation has gone down with turnover amounting US$400 million in value last year representing 10 percent of total market capitalisation.