2011 proved difficult for Zimbabwean equities

2011 proved difficult for Zimbabwean equities
Published: 11 January 2012 (865 Views)
The ZSE performed poorly in 2011 as the Industrial index eased 3.6% while the Mining Index slumped  49.8%. The poor performance can be attributed to the scarce liquidity, unclear policies around economic empowerment & indigenisation and the Eurozone crisis. The unstable geopolitical environment in the Middle East and North Africa led to increased risk aversion and together with the Euro-zone debt crisis led to a reduction in the total funds being availed for investments in perceived “riskier” emerging markets. Consequently, the market retreated although on thin volumes in normal trade as daily average value traded amounted to approximately US$ 1.9m representing an average market turnover of a mere 0.04%. Foreigners were net buyers in 2011 and accounted for 71% of average daily turnover.

Although the prices of most heavyweight counters remained fairly steady, AICO which went up a marginal 5.6%, Econet down 16.1%, Barclays down 53% and Meikles down 64%, disappointed. Most of the smaller cap counters, however, recorded stronger returns and topped the movers. The bottom laggards for 2011 are generally characterised by massive undercapitalisation, unattainable gearing levels, poor management and boards of directors.

While the crystal ball is difficult to read at this juncture given the uncertainities, we believe that the ZSE valuations are generally attractive. In our view, that the ZSE still carries good long-term growth potential given the economy's strong growth prospects, albeit off a low base. Nonetheless, the economy remains hugely undercapitalised with most companies still saddled with heavy and expensive borrowings. In our view, volatility will likely stay high until the local uncertainties clear and the Eurozone and US financial crisis stabilize. In that regard, investors should ride the speed humps that will slow the progress of the indices down, remembering to maintain a careful selection policy.

- Imara Stockbrokers

Tags: Equities,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

'Biti and Welshman Ncube must not contest at congress'

by Staff reporter | 21 April 2019 | 131 Views

Multiple inconsistencies in Mr Multiverse Dungani's article.

by Thulani Nkala | 21 April 2019 | 83 Views

Zanu-PF begins constitutional amendments

by Staff reporter | 21 April 2019 | 136 Views

WATCH: Pastor kisses a woman to remove a demon

by Mandla Ndlovu | 21 April 2019 | 161 Views

'Mnangagwa's advisor is a CIO double agent'

by Mandla Ndlovu | 21 April 2019 | 180 Views

'Mnangagwa and Enock Sithole were not crocodile gang members'

by Mandla Ndlovu | 21 April 2019 | 123 Views

President Mnangagwa's Easter message to Zimbabwe

by Mandla Ndlovu | 21 April 2019 | 93 Views

WATCH: Chiyangwa turns his 34 bedroom house into a hotel

by Mandla Ndlovu | 21 April 2019 | 120 Views

George Charamba gets baptism of fire

by Mandla Ndlovu | 21 April 2019 | 104 Views

Dreaded CIO Minister in fresh mine wrangle storm

by Mandla Ndlovu | 21 April 2019 | 101 Views

Matebeleland Collective a ZANU PF and British creation?

by Mandla Ndlovu | 21 April 2019 | 78 Views

Criminals cash in on lost IDs, certificates

by Staff reporter | 21 April 2019 | 86 Views

192 Zimbabweans refused entry into South Africa

by Staff reporter | 21 April 2019 | 95 Views

'Peasant farmers now driving Zimbabwe's economy'

by Staff reporter | 21 April 2019 | 84 Views

'Foreign aid will not bail out Zimbabwe'

by Staff reporter | 21 April 2019 | 76 Views

White farmers told to pay ex-workers first

by Staff reporter | 21 April 2019 | 75 Views

Chamisa clinches victory

by Staff reporter | 21 April 2019 | 92 Views

Rugare Gumbo snubs Mnangagwa & Zanu-PF

by Staff reporter | 21 April 2019 | 102 Views

Knives out for Selmor Mtukudzi

by Staff reporter | 21 April 2019 | 172 Views

Anti-sanctions crusade heats up

by Staff reporter | 21 April 2019 | 134 Views

Holiday accidents kill 16

by Staff reporter | 21 April 2019 | 118 Views

Dutch coach linked with Dembare

by Staff reporter | 21 April 2019 | 138 Views

Lupane East MP's burial unites Zanu-PF, MDC

by Staff reporter | 21 April 2019 | 180 Views

ZITF sold out

by Staff reporter | 21 April 2019 | 103 Views

Controversial Harare referee condemns Hwange to defeat

by Staff reporter | 21 April 2019 | 113 Views

'Zimbabwe will rise again'

by Staff reporter | 21 April 2019 | 109 Views

Whistleblowers pocket $3million after helping Zimra

by Staff reporter | 21 April 2019 | 103 Views

There is a light at the end of price hikes

by Dr Masimba Mavaza | 21 April 2019 | 140 Views

Cyclone Idai pupils, teachers death toll rises

by Staff reporter | 21 April 2019 | 59 Views

Zimbabwe to benefit from Beijing's Belt and Road Initiative

by Staff reporter | 21 April 2019 | 97 Views

Tour company demands indecent pictures for jobs

by Staff reporter | 21 April 2019 | 100 Views

Velaphi: Daring by bringing first batch of weapons into Rhodesia

by Pathisa Nyathi | 21 April 2019 | 115 Views

Cyberbullying and Cyber Harassment

by Engineer Jacob Kudzayi Mutisi | 21 April 2019 | 76 Views

What I learnt from man City Vs Tottenham Champions League match

by Mthokozisi Gwizi | 21 April 2019 | 93 Views

'Gukurahundi reports are not missing'

by Mandla Ndlovu | 21 April 2019 | 121 Views

Independence Day accidents claim 6

by Staff reporter | 21 April 2019 | 89 Views

Mutendi says people must honour Mnangagwa

by Staff reporter | 21 April 2019 | 99 Views

Memorial service revives pain of January killings

by Staff reporter | 21 April 2019 | 81 Views