ZSE gains US$290m

prevailing on the market.
Market capitalisation had closed December 2010 at US$3,8 billion rising progressively to reach US$4,1 billion by July showing appreciation of share prices across the 79 listed companies.
Market capitalisation is the value of a company obtained by multiplying the share price by the number of ordinary shares in issue.
An increase in market capitalisation shows investors’ confidence in the performance of a company and the future of an economy.
Zimbabwe’s economy is this year expected to grow by 9,3 percent, buoyed by mining and agriculture sectors.
Foreign portfolios dominated market transactions over the past seven months, averaging 69 percent in both market sales and purchases for the period.
Purchases accounted for US$112,2 million of the turnover while US$77 million accounted for the sell side.
Over the same period last year foreign portfolios had only accounted for 32 percent of market transactions.
Purchases have, however, been generally trending on a constant level for the entire period despite peaking to US$25 million in February this year.
The equities market has been depressed from March, as investors were sceptical of the Government’s indigenisation policies, resulting in the market trading in the negative.
During the period under review, the mainstream industrial index grew from 151,27 points recorded on the last day of trading last year to 163,69 points by end of July this year, a 8 percent increase.
The resources index, however, fell from 239,08 points to 160,17 points mainly due to issues relating to perceptions on indigenisation and lack of funding for listed mining companies.
All the four listed mining companies are struggling to source funds for recapitalisation, working capital and to retire expensive debts.
It is understood that more mining companies are being enticed to list on ZSE, a move that will boost the performance of the index and market capitalisation.
During the seven months, turnover totalled US$275 million.
The market performed well in the first three months of the year before slipping southwards in March after the announcement of the indigenisation regulations.
The resources index reached an all time high in February recording 239,08 points before recording its lowest in July at 160,17 points.
However, the biggest turnover year to date was achieved in July at US$51 million despite the mining index recording it’s lowest in that month at 170,17 points.
The main stream industrial index recorded its lowest in March on indigenisation, at 160,65 points.
Going forward market capitalisation is expected to close the year at about US$5 billion as at least three listings are expected on the bourse before the end of the year.