Foreign buyers seen pushing ZSE to best performance since dollarisation

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By the Source on December 9, 2013.

Strong foreign investor interest on the Zimbabwe Stock Exchange has lifted the bourse to its best performance since dollarisation in 2009, analysts have said.

As of December 5, 2013 the benchmark index had gained 40 percent from the beginning of the year while total turnover for the same period amounted to $458.9 million, surpassing the $448.18 million for the whole of 2012.

Turnover in the first week of December was $22.5 million in four trading sessions, suggesting that total turnover for 2013 could pass the $477.5 million that was recorded in 2011 and so far the highest year for the bourse.

Foreign buyers have dominated trades, with about 60 percent in turnover. The percentage was over 80 percent in the second half of the year as poor liquidity in the economy limited the participation of locals, another analyst said.

Total foreign buying for the 11 months to November 2013 amounted to $256.2 million compared to $200.7 million during the same period last year.

“Foreign investors have continued pouring in money in local stocks largely on the back of potential gains in hard currencies,” said AfrAsia Kingdom in its weekly analysis of the local stock market.

“The use of hard currencies in the country has ensured that foreign investors have little foreign exchange risk and also the relaxation of foreign exchange controls enables the repatriation of dividends and capital gains.”

This, it added, had increased foreign buying from 38 percent of total ZSE turnover in 2010 to 40 percent in 2011 and 47 percent in 2012. For the 11 months to November 2013 foreign buying constituted 59 percent of total ZSE turnover.

The growth in turnover however is concentrated in consumer stocks, mainly Delta, Econet, Innscor, CBZ, OK Zimbabwe, Dairibord and banking group FBC Holdings.