Harare — THE industrial and mining indices registered comprehensive gains surging 77 percent and 49 percent respectively on year to date basis since 19 February 2009 when Government adopted the multiple currency system.
Positive gains were largely as a result of restored investor confidence as well as business friendly policies crafted to end the decade long recession.
On the contrary, last month was a blood bath for the local equities market as investors scrambled to exit following the announcement of the Indigenisation and Economic Empowerment Act.
The mainstream index plunged by 10,32 percent to close at 140,37 aggregate points whilst the mining index could not respond to firming commodity prices after shedding a massive 16,55 percent to close at 175,08 aggregate points.
The equities market was further weighed down by the liquidity crisis currently impeding business performance.
Bearish sentiment culminated in only 14 counters advancing compared to 55 counters trading in the negative territory and seven defensive stocks.
Volumes as well as value trades declined for the month by 40 percent and 8,7 percent respectively to only 444,2 million shares valued at US$29,6 million.
Powerspeed was the month's best performer after gaining 50 percent to close at US1,50c.
Dually listed counter PPC occupied second spot surging a remarkable 41 percent to close at US360c from US255c.
The company was given full fungibility status so that investors can buy shares on the local bourse and sell them on the Johannesburg Stock Exchange and vice versa.
Phoenix rose by 33 percent to close at US4c whilst Gulliver and NTS occupied fourth and fifth place after putting on 25 percent and 20 percent respectively.
The shakers pack was led by Pelhams down by a solid 80 percent from US0.25c to close at US0,05c, followed by engineering counter Zeco which slid by 50 percent to close at US0,50c.
The pair of Cairns and Hunyani also shed in value by 47 percent apiece to close at US2c and US2,50c respectively.
Truworths capped the shakers list receding by 41 percent to settle at US0,95c.
Going forward, bearish sentiment remains entrenched on the local bourse with stocks declining to historic lows as the total market capitalisation breached the psychological US$4 billion resistance level.
The tight liquidity prevailing in the market coupled with attractive rates on the money market continue to depress activity on the bourse as investors sell off stocks to invest on the money market. The impending reporting season is usually a time for the stock market to be in a euphoric mood; however since the adoption of the multiple currency system most companies have been grappling to operate even at 50 percent of their capacity amidst tight liquidity conditions prevailing in the market.
The trend has seen most companies reporting depressed earnings underpinned by high finance costs, a significantly low working capital and a depleted balance sheet.
