Shares Continue to Tumble On ZSE

Harare, Feb 26, 2010 (The Herald/All Africa Global Media via COMTEX) -- STOCK prices on the Zimbabwe Stock Exchange have continued on a free-fall as the market is still down on year-to-date basis due to thin liquidity.

Investors are sceptical following the publication of Statutory Instrument 21 of 2010 on Indigenisation and Economic Empowerment Regulations.

The main aim and objective of the regulations is to achieve 51 percent Zimbabwean shareholding in existing businesses.

Yesterday, the mainstream industrial index shed 1,22 percent to close at 139,54 points.

Dual-listed PPC was US19c lower at US360c, dropping from a US104c gain on Wednesday after the cement manufacturer was granted full fungibility by the Exchange Control Authorities.

Against this background, local shareholders can now trade their shares on the Johannesburg Stock Exchange.

Another dual-listed insurance giant, Old Mutual, dropped US6c to trade at US149c.

Mobile phone operator Econet and Natfoods both lost US5c to US465c and US120c as ABCH, Aico Africa and Cafca fell US2c each to close at US16c, US18c and US13c respectively.

On the upside, Meikles gained US4,98c to close at US40c, Star Africa added US1,40c to trade at US8,40c and TA pushed a cent to US40c.

Afre edged up US0,51c to close at US7,51c whilst Edgars was US0,30c higher at US4c.

However, the mining index recovered 3,34 percent to close at 175,29 points as the coal miner, Hwange rose US3c to trade at US34c while Bindura, Falgold and RioZim traded at previous day's levels.

Liquidity should continue to plague the market in the coming week as activity is likely to be depressed.

Most foreign investors are likely to throw caution to the wind.

"We believe this week, however, will see the responsible authorities come out in the open to shed more light on how indigenisation will be enacted, if they do not decide to take it back to the debating room," said one analyst.

Bearish sentiments on the market comes ahead of the reporting season.

Investors are sceptical following the publication of Statutory Instrument 21 of 2010 on Indigenisation and Economic Empowerment Regulations.

The main aim and objective of the regulations is to achieve 51 percent Zimbabwean shareholding in existing businesses.

Yesterday, the mainstream industrial index shed 1,22 percent to close at 139,54 points.

Dual-listed PPC was US19c lower at US360c, dropping from a US104c gain on Wednesday after the cement manufacturer was granted full fungibility by the Exchange Control Authorities.

Against this background, local shareholders can now trade their shares on the Johannesburg Stock Exchange.

Another dual-listed insurance giant, Old Mutual, dropped US6c to trade at US149c.

Mobile phone operator Econet and Natfoods both lost US5c to US465c and US120c as ABCH, Aico Africa and Cafca fell US2c each to close at US16c, US18c and US13c respectively.

On the upside, Meikles gained US4,98c to close at US40c, Star Africa added US1,40c to trade at US8,40c and TA pushed a cent to US40c.

Afre edged up US0,51c to close at US7,51c whilst Edgars was US0,30c higher at US4c.

However, the mining index recovered 3,34 percent to close at 175,29 points as the coal miner, Hwange rose US3c to trade at US34c while Bindura, Falgold and RioZim traded at previous day's levels.

Liquidity should continue to plague the market in the coming week as activity is likely to be depressed.

Most foreign investors are likely to throw caution to the wind.

"We believe this week, however, will see the responsible authorities come out in the open to shed more light on how indigenisation will be enacted, if they do not decide to take it back to the debating room," said one analyst.

Bearish sentiments on the market comes ahead of the reporting season. Most companies are likely to report losses as due to financial sonstraints.

Funds available on the market are expensive presently. However, the return of Kingdom Financial Holdings Limited and Meikles Africa should bring some impetus to the market.

Meikles started trading on the bourse on Monday, paving way for the entities to work out their demerger ratios thereby giving investors more options on the bourse.