Stocks fall as bourse opens month on a weaker note
HARARE – The local bourse opened April on a weaker note, as stocks fell for a third consecutive month, with President Robert Mugabe’s hard-line talk of indigenisation feeding into an already jittery market.
Brighter prospects forecasted by several analysts earlier in the year after the Zimbabwe Stock Exchange (ZSE) got off to a flier in January 2011, went up in flames last week, following the gazetting of indigenisation rules at short notice.
The rules compel foreign multinational companies to sell 51 percent of their stakes to locals by September 25 2011.
But several industrialists and economists say the government does not have the funds to help locals buy the shares, adding that the move would only jolt investors and send the economy into a tailspin.
"Finding the sums needed to pay for 51 percent of the mining industry will be quite a challenge… more serious longer-term effect of these regulations will be the almost complete arrest of new mining investment inflows," economist John Robertson said.
The mining index fell 1.1 percent to close 236.47 points on April 1 in Harare, compared with its close on the first day of trading in March.
The broader industrial index of blue chip companies plunged into negative territory in intraday trade on Friday, dropping 0.43 percent to close at 159.96 points. Industrials were driven down largely by heavyweight counters, in a continued spell of losses since mid-March 2011.
Old Mutual took a battering, going down 2 cents to 159 cents, while bourse heavyweight and telecommunications company Econet, slipped 9 cents to trade at 480 cents on the first day of April, while PPC lost 2, to close at 318 cents.
Hwange, the country’s biggest coal miner, was up 11 cents to 75 cents, compared with its close on the first day of trading last month. Hwange last week released its full-year results for the financial year ended 31 December 2010, indicating it had posted a142 percent profit to US$ 6.3 million, up from US$2.6 million in the previous year.
According to a statement, the Hwange Coking Coal (HCC) and Hwange Industrial Coal (HIC) sales amounted to 533 299 tonnes and were 24 percent above the 429 213 tonnes achieved the previous year.
"It is pleasing to note that despite the challenges in the macroeconomic environment, the company`s production and sales volume performance increased by 47 percent," read the statement.
Zimbabwean wholly-owned diversified miner RioZim traded 2.01 cents lower to close at 192.99 cents, in the wake subdued gold output, while Bindura and Falgold traded flat at 10 cents and 6.50 cents respectively.