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Equities in marginal gain
THE Securities Commission last week made a rather disturbing and naïve statement at a workshop held in the capital that financial journalists should now be treated as securities investor advisors and should by December 31, pay US$2 000 accreditation fees.
I am sure this move will not just go unchallenged by media houses.
SEC was created to regulate the core financial markets and not what the journalists do or to advocate for their affiliation.
Financial and business reporters usually focus solely on financial news, and specific equities markets facts and numbers.
Financial journalists do not recommend what stocks investors should or should not buy.
One observer queried whether AIPPA or the Securities Act should now govern operations of financial journalists.
Instead of just imposing the rule, I think Mr Chirume and his team at SEC should have done some research and also consult relevant bodies such as the Media Commission of Zimbabwe.
A licensing fee per individual per year and 0,35 percent of gross revenue, which is gross salary of financial journalists and securities advisors, would be an unjustified deduction on their salaries.
Zfn, a leading financial news organisation noted: "This amount is beyond reach of many and the likely scenario is that very few will afford to get licensed.
"Imagine a market where there are no analysts or financial journalists because the capital market regulator wants to be paid first.
"It kills rather than build the market and that is a classical example of unintended consequences. Unless if SEC wants to muzzle the information flow in the market and indirectly promote inefficiencies.
"For whose benefit. The less players there are in the market, the easy with which the market can be manipulated or rigged.
Equity review
Last week, stocks on the Zimbabwe Stock exchange gained marginally as selected blue chip counters advanced. The top share index rose 1,3 percent to 125.36.
The mining index gained 7,8 percent higher, offsetting the previous week’s losses at 134.75.
Weekly revenue was about US$4,8 million, 2 percent higher from the previous week.
Modest surges in Bindura and Rio Zim to US10c and US230c respectively, led to the rise in the mining index.
Falgold traded unchanged while Hwange added US0,01c to US20,01c.
Driving the industrial index higher were marginal gains in AICO, Barclays, Econet, Innscor, Seedco and Old Mutual.
Of the ZSE share, Interfresh and Edgars led the pack with a 66.67 percent gain each at US0,5c and US5c respectively.
Trust and Gulliver share the second position with an identical rise of 50 percent. Ariston rose 42.86 percent gain at US1c.
General Beltings and Celsys both declined 25 percent to lead the week’s losers at US0,5c and US0,03c. ZBFH and CFI were amongst the top week’s losers paring 12,5 percent and 11.1 percent at US7c and US16c respectively.
Stocks on the ZSE seem to have found direction, though for a short term, registering six consecutive gains since the announcement of the Mid-Term Fiscal Policy Review.
Positive trading across the board was rejuvenated by projected mineral resource sales, particularly Marange diamonds as a source of a stimulus package to revive productive sectors.
Further proposals to change the revenue collection procedures in the mining sector from corporate tax-based to sales-based figures are also meant to expedite this end and improve the fiscal space also added some impetus on the market.
Positive trading comes at a time when the stock market has largely been low, mainly due to market liquidity constraints.
On the other hand, lack of clarity on the country’s empowerment laws resulted in foreign investors shunning the equities market.
The recent financial reporting season failed to drive the market as most companies reported disappointing financial results.
Capacity utilisation has remained stagnant between 35 percent and 50 percent, below the projected 60 percent.
Of the companies that sought recapitalisation mainly through rights issues, shareholder support averaged 50 percent with the balance being taken over by the underwriters.
In the first six months to June, the equities market lost 30 percent.
The industrial index which started the year at a high of 156.52 points had dropped to 127.46 points by June 2010, while the mining index fell from an opening of 209.8 points to 143.08 points.
Similarly, market capitalisation fell from US$3.97 billion in January 2010 to US$3.19 billion by the end of June 2010.
The poor performance is a result of investors pulling out their investments reflecting depressed investors’ sentiment over perceived financial risks, especially following gazetting of the Indigenisation Regulations on March 1.
In particular, foreign investors’ contribution to market turnover fell from between 40-50 percent to an average 20 percent per month.
Elsewhere in the region, the JSE stocks booked their biggest gain in more than two weeks as the JSE Top40 index of blue chips rose 1,98 percent to 24 768.14 points, while the broader all share index was up 1,77 percent to 27 833.52 points.
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