Stock market remains depressed

TRADING activity on the stock exchange remained depressed last week with losses in stocks across the board, leading to a 1,5 percent fall in the industrial index.
Only four counters traded in the positive territory after gaining 0,98 percent. Buying activity was low as value of trades amounted to about US$6,73 million from US$8,86 million in the previous week.
The country’s political landscape is expected to remain unstable with some political violence cases being reported.
A stable political environment remains key to unlocking external funding for Government and the private sector.
As long as the country continues to be rated as an unfavourable investment destination, investor confidence will remain low.
The Social Science Research Network reports that the world over it has been observed that investment is 40 percent more sensitive to stock prices during election years compared to non-election years.
The industrial index opened the week lower at 159,85 points after being weighed down by PPC, which lost US7c to trade at US323c.
Delta, the country’s largest beer and soft drinks maker, slipped a cent to close at US72c while Meikles lost US0,70c to US48,30c.
Five counters partially offset the losses as Interfin gained US5c to US30c while Old Mutual added US3c to settle at US159c.
The industrial index further retreated on Tuesday with a marginal slide of 0,03 percent to 159,81 points due to major losses in tobacco processor BAT and hospitality giant Meikles.
The industrials continued on the downside on Wednesday, further recording a marginal 0,44 percent drop to 159,11 points.
Gains in Cafca, Old Mutual, AICO and CBZ helped partially offset losses in Delta, Seed Co and Meikles.
Cafca closed 8 percent lower at US27c. Insurance giant Old Mutual, agro-processing AICO and CBZ slid 1 percent apiece to close at US160,17c, US18,1c and US17,5c respectively.
On the losing end Delta shed 1 percent to US72c. The mining index emerged from flat trading, surging 0,32 percent to 225,15 points on the back of a 4 percent advance in nickel producer Bindura at US12,51c.
The company signed an offtake agreement with Glencore International, which is anticipated to calm the nerves of uneasy investors.
Hwange and RioZim maintained their previous prices while Falgold did not trade.
The industrial index finished weak at 158,44 points on Thursday after a 0,71 points or 0,45 percent loss.
BAT, which struggled throughout the week, ended US5c down at US170c, PPC was US3c softer at US323c and Delta slid a cent to close at US71c.
The mining index gained 0,26 percent to close at 226,61 points.
Imara Edwards Securities Research has projected a target price of US84c for Meikles by year-end, implying potential upside of 71,4 percent.
The Meikles share price has been negatively impacted by shareholder squabbles and risks surrounding the indigenisation debate. The bickering on the part of shareholders has done enough damage to the share price. However, the dust has begun to settle.
Global focus
There is a continuous shift by investors to developed markets as outflows from emerging market equity funds were at their strongest in three years in the week ending February 2.
Investors continued to take last year’s gains and putting them to work in the US, Japan and other developed markets.
US Equity Funds extended their current inflow streak to five weeks and US$20,6 billion, Japan Equity Funds took in fresh money for the 10th week in a row and year-to-date inflows into global equity funds climbed past the US$6 billion mark.
Sentiment towards emerging markets was not helped by the turmoil in Egypt and parts of North Africa, with Middle East and Africa Regional Equity Funds experiencing their biggest weekly outflow since mid-the fourth quarter of 2007.