adminOliver Kazunga Senior Business Reporter
TRADING on the Zimbabwe Stock Exchange (ZSE) has remained subdued with foreign investors having bought $257,2 million worth of shares since the beginning of the year to date.Due to the tight liquidity situation prevailing in the economy since the adoption of the multi-currency system in February 2009, trading on the local bourse has been dominated by foreign investors.
As of November 14, 2014, the ZSE indicated that foreign investors had bought $257,2 million worth of shares and sold shares valued at $164,84 million since the beginning of the year.
Economic analysts blamed the subdued trading on the prevailing political bickering, which they said was causing investors to be jittery.
“There isn’t much of activity on the ZSE taking into consideration that the net buys on the stock exchange from January this year to date is less than $100 million. The index has fallen with the value of shares also declining,” said Trust Chikohora an economic commentator.
“Investors buy shares looking at future prospects. Right now there’s political chaos in the country resulting in investors losing confidence in the stock exchange.”
He said political bickering within the ruling Zanu-PF party and squabbles rocking the opposition MDC formations were worrying investors who have adopted a wait and see attitude.
“Even after the forthcoming (Zanu-PF) congress, investors will just wait to see what will happen on the political front,” he added.
Another economic commentator, Peter Mhaka said foreign investors had in the past spurred activity on the bourse maintaining appetite for shares on the ZSE.
“Although the net buys by foreign investors are little, it’s those foreign investors that have spurred some activity on the ZSE. If they hadn’t bought the shares, probably none of the local investors could have bought them,” he said.
“The prevailing economic situation where liquidity is tight has in the past negatively impacted trading on the ZSE but the present political condition has contributed to the slackening of activity on the local bourse. As a result, lack of investor confidence on the bourse has been exacerbated by the political situation.”
Wendy Mpofu echoed similar sentiments saying the value of shares on the stock exchange continued to decline as a result of un-favourable trading.
The ZSE indicated in January that foreign investors bought shares on the ZSE valued at $49,87 million while sales during the same month were $24,06 million.
In February only shares worth $14,96 million were bought compared to $9,12 million sold.
A total of $13,05 million was realised from March shares compared to $12,97 million shares sold during the same period.
The figure rose to $32,18 million in April, dropped to $21,74 in May and about $15 million in June and July for shares bought.
August recorded $53,59 million against sales worth $12,73 million.
In September, foreign buys went down remarkably to $16,63 million compared to sales of $16,47 million.
Foreign buys in October stood at $17,12 million while sales were at $10,92 million.
As of November 14, 2014, the value of shares bought were $7,46 million while sales stood at $7,71 million.
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derick.khumalo