HARARE – The Zimbabwe Stock Exchange’s market capitalisation last week breached the $5 billion mark for the first time in nearly two years.
The local bourse closed the week at $5 179 592 804 buoyed by gains in blue chip counters such as BAT, Delta, Innscor, SeedCo, Meikles and Colcom.
One of Africa’s leading seed producers, SeedCo, was up $0,0900 to close the week at $1,1000, while cigarette manufacturer BAT was up by $0,0500 to trade at $17,10 and the beverage giant Delta ended $0,0455 higher at $1,1020.
Diversified conglomerate Innscor continued its winning streak as it put on $0,0310 to settle at $0,6510, Simbisa rose by $0,0200 to $0,2000 while cement producer PPC improved by $0,0125 to settle at $0,6825.
Week on week the industrial index gained a hefty 5,84 percent to close the week at 177,79 points.
The stock exchange’s market capitalisation has declined steadily since the 2013 elections that ended a five-year power sharing agreement between the MDCs and Zanu PF, reflecting waning confidence in President Robert Mugabe’s government and its ability to turn the country’s economic fortunes around at a time foreign investment remains scarce.
According to latest statistics from the ZSE, market capitalisation reached its peak of $6 billion in July 2013 since the introduction of the multi-currency regime in 2009.
However, in the same month general elections were held after which market capitalisation started declining to reach $2,8 billion at the end of January 2016.
The statistics show market capitalisation has been on a slippery slope, closing 2013 at $5,2 billion, after losing about $800 million between July and December 2013, before dwindling further to $4,3 billion and $3,1 billion at the end of 2014 and 2015 respectively.
The value of shares bought by foreigners also dwindled from an average of around $24,5 million per month in 2013 to an average of $23,8 million per month in 2014 before falling further to an average $10 million per month in 2015.
In the first month of 2016, the value of shares bought by foreigners stood at $5,2 million, the lowest since June 2010’s value of $4,9 million.
However, the bourse has been gaining momentum in the past six months as investors flee bond notes and are finding haven in stocks.