Mining counters remain unresponsive

Enacy Mapakame Bulls & Bears
Mining counters have remained unresponsive to forecast brighter prospects for global metal prices with the Minings Index stagnating at 60,73.

In the past five trading sessions, activity on the Minings Index remained subdued with paltry trades recorded in nickel producer Bindura.

All the four counters making up the Minings Index, Bindura, Falgold, Hwange and RioZim remained flat at 4 cents, 3 cents, 32,50 cents and 1 cent respectively.

Month to date, both gold and platinum have gained 2,20 percent and 1,81 percent respectively, although both minerals have succumbed to a 0,8 percent and 0,3 percent decline in the week.

In the week, global prices of gold have fluctuated between $1 229,40 and $1 231,10 an ounce and a 52 week high of $1 365,81.

Gold is one of the country’s top foreign currency earners together with tobacco, while the country also has the second largest deposits of platinum globally, after South Africa.

According to InfoMine, a mining markets and investment data hub, the price of nickel rose 4,7 percent to $4,84 a pound in the last month.

Market watchers contend the new direction in politics in China and ecological problems in the Philippines reduced the supply of nickel last year but some economists expect a nickel deficit and resultantly high prices.

The World bank in its commodity forecast report says average spot price for nickel would fall slightly further in 2016 from 2015’s $11 863 a metric tonne, but recover to $20 000 a metric tonne in the next decade.

The International Monetary Fund also anticipated a similar trend with decline in 2016 to $9 611 metric tonnes before recovering to $11 304 a metric tonne in 2017 and further growth in the coming decade.

In other commodities, prices of copper rose on the back of supply disruptions at largest copper producer BHP Billiton’s Escondida mine in Chile due to industrial action.

Additionally, major copper producer in Indonesia is threatening to partly suspend operations owing to lack of an export permit in a row between the mining company and government.

The Chile and Indonesia cases are expected to put pressure on production volumes hence increase prices.

Locally, the Zimbabwe Mining Development Corporation is looking for new investors to process copper at Alaska Mine dumps after Australia’s Lintmar Mining’s contract expired.

Elsewhere, Unki Mine reported that production went up 7 percent in the fourth quarter of 2016 on the back of increase in tonnes milled as well as higher grade.

Meanwhile, the mainstream Industrials Index receded 1 percent to 138, 38 on losses in Delta and other heavy cap counters.

In the week under review, the equities market also recorded its slowest trading session since the beginning of the year on Monday as the market yielded a measly $21 188 from a volume of 215 789 shares exchanging.

Turnover for the week amounted to $2,926 million after 35 million shares exchanged.

Delta has in the past five trading sessions continued to lose value on weak demand.

The beverages maker, also the biggest stock by market capitalisation lost 2,8 percent of value to 82,9 cents.

Banking group, Barclays headlined fallers after it succumbed to a 17 percent decline to 2,80 cents in the week under review. Year to date, the stock is 28 percent weaker.

Cement maker PPC rose 1,75 percent to 58 cents. Its parent company, South Africa’s PPC Limited this week proposed merging with its rival Afrisam Group to consolidate its market dominance.

Since beginning of this year, PPC has gained 5,45 percent of value.

Property concern, Pearl Properties fell 1,73 percent to 3,40 cents.

On the upside, cigarette maker BAT rose a marginal 0,02 percent to $15. Other top capitalised stocks, Econet, Old Mutual, Simbisa and Innscor remained unchanged at 20 cents, $3,50, 16,50 cents and 48 cents respectively.

Hospitality group, Meikles and meat processor Colcom also remained flat at 10 cents and 35 cents in that order.

Government recently introduced a 15 percent VAT on meat, which was later reversed.

But retailers had already levied the tax, forcing a sharp increase on meat and related products, a discord that is negatively impacting on investor sentiment for stocks like Colcom, Innscor and other unlisted companies.

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