Foreigners have been net buyers in all of the trading sessions during the week.
THE Zimbabwe Stock Exchange (ZSE) continued on a free fall this week, on the back of losses in some heavyweights, despite signs of returning foreign interest in local stocks.
The Zimbabwe Defence Forces’ “operation restore legacy”, which was declared on November 15 and ended on Monday this week, effectively ended a ZSE bull run which persisted for almost a year, running from November last year and ending on November 14.
During the 12 months leading up to November 14, the ZSE industrial index gained 326,76 percent and was the best performing equities index globally.
However, since November 14, the market has been in free fall, losing close to $6 billion in market capitalisation. The losses persisted during this past week from Thursday last week up to yesterday.
The losses seen in the local stock market since November 14 are being viewed by analysts and commentators as overdue normalisation. The losses have been attributed to improved confidence in the broader economy.
“The main driver of the just ended bull run was currency uncertainty and inflationary fears. The end of the bull run can only mean market optimism,” an analyst said.
The benchmark industrial index lost 4,22 percent during the week to close yesterday at 318,43 points. The losses were driven by losses in selected blue chips. Delta lost 0,17 percent week on week to close yesterday at $1,4975.
Econet shed 13,78 percent during the week to trade at $0,86. British American Tobacco shed one percent to settle at $35,7005 and Innscor dropped 8,02 percent to trade at $1. Old Mutual, however, added 1,02 percent during the week to trade at $4,5461.
The mining index gained a marginal 0,79 percent during the week to close yesterday at 141,47 points following gains of 2,66 percent in Bindura Nickel Corporation which closed yesterday at $0,054.
Meanwhile, foreigners were net buyers in all of the trading sessions during the week.
Foreigners have now been net buyers in three consecutive weeks. During the year, foreigners dominated the disposal of stocks. During the 10 weeks (50 trading sessions) prior to November 29, when foreign interest in local stocks seemed to have kicked in, the ZSE had only 14 sessions in which foreigners were net buyers.
In contrast, foreigners have been net buyers in 14 of the last 15 trading sessions on the ZSE.
Analysts say the renewed foreign interest in local stocks as evidenced by activity on the market over the past two weeks, has been driven by the anticipation of an improvement in the economy following the resignation of Robert Mugabe on November 21.