Stock losses drag ZSE lower

0,2 percent.
The resource counters index also fell 1,42 on RioZim losses and perceived uncertainties over the indigenisation law, which require foreign-owned firms to transfer majority stakes to black indigenous Zimbabweans.
The industrial index dropped 0,39 points to 160,84 points while the mining index of only four stocks lost 2,25 points to 155,66 points.
Last week, the Government said it was going to start a process of reining in mines that have failed to file acceptable indigenisation plans.
Implats’ shares fell more than 3 percent on the JSE last Thursday after Government announced it had started the process of revoking the business licence of its local unit Zimbabwe Platinum Mines.
The shares recovered on Friday morning after Zimplats said it had requested for more time to work on another plan in line with the policy.
There had been no change in the share price of Zimplats since the announcement of cancellation of its licence last week. Zimplats is listed on the Australian Stock Exchange and it has been steady at A$11.
The upside potential of the market remains limited due to lack of liquidity and perceived lack of clarity on the indigenisation and empowerment laws.
Since the introduction of the multiple-currency system in February 2009, the major participants on the stock exchange have been foreigners.
The market, however, experienced massive foreign investor flight after the announcement of perceived restrictive laws in February last year.
Accordingly, local investors in the form of individuals and institutional investors now dominate the market. Most businesses in the economy are seeking funds to recapitalise their operations and grow capacity utilisation.
During the hyperinflationary environment, Zimbabwe experienced an extended period of unprecedented erosion of capital on a national scale and at corporate level, which now requires immediate replacement.
This leaves few market players with the financial muscle to move volumes on the exchange as most of the financial resources are directed at funding operations.
On the other hand, most local investors are net sellers because they do not have the capital to participate effectively. Hence many buyers, are especially apprehensive about participating on the ZSE because they are not happy with the indigenisation laws and are not supporting it.
Foreign investor participation is critical as it brings in new more committed capital and stimulates competition on the stock market.
Stocks Review
There could be more buying into Econet after its share price dropped 7,5 percent to close the week at US379c.
Econet, the country’s biggest cellular company, is targeting to grow its subscriber base to six million.
Innscor gained US2c on Friday after the retail conglomerate recorded a 51,3 percent increase in after-tax profit for the full year to June 30 2011 driven by better efficiencies, strong volume and revenue growth.
Revenue increased by 28 percent to US$516 million while profit after tax increased to US$32,7 million from US$21,6 million the prior year.
Natfoods rose US2c to US93c after it recorded a 25 percent rise in full-year revenue, spurred by growth across its operations and proceeds from the sale of properties.
Turnover came in at US$201,1 million up from US$160,8 million in the comparative period last year, its financial statement released last week showed.
Basic earnings per share increased to
US7,37c during the period under review, up from US4,60c per share while net profit was US$5 million from US$3,1 million in the previous period.
Cafca gained US4c to US64c on Friday. Fidelity Life was up US1,01c to US13c. The group reported half-year profits to June rose 431 percent to US$4,9 million due to strong demand for insurance products.
RioZim dropped US15c to US85c. The stock reached US100c on Wednesday.