zim_stock.jpgMarket analysts have expressed optimism of increased activities on the local bourse during the current year, projecting a US$5 billion plus market capitalisation by year end.


The Zimbabwe Stock Exchange which for the greater part of 2010 was characterised by sluggish performances due to capital constraints and cautious approach by investors is anticipated to perform better in 2011 driven by the improving macro-economic environment.


Economic analyst, Mr. Christopher Mugaga believes shares on the local bourse which have been undervalued have the potential to record gains given the anticipated 9.3% economic growth and increased appreciation of the indigenisation regulations.


“It is not going to be significant change but we anticipate that the 77 counters which have been hugely discounted have the potential to pick up at the back of stable operating environment. At the end of the year, we expect the market capitalisation of not less than US$6 billion,” said Mr. Mugaga.


While the opening week of 2011 was characterised by subdued trading with several counters trading in the negative territory, Investment Consultant Mr. Herbert Mazonde who expressed optimism of more listings, expects the stock market to be largely driven by economic and political developments. 


“We expect more volatility on the market with the first half characterised by cautious approach by investors, while the second half and the post elections era is likely to be characterised by more activities such that we expect the market cap to reach more than US$5 billion,” Mr. Mazonde said.


The Zimbabwe Stock Exchange which opened 2010 on US$3.9 billion market capitalisation was expected to reach the US$8 billion mark by the end of last year.


However, liquidity constraints coupled with cautious approach by investors restricted the market from reaching the set target.


More firms are expected to list on the market as a way of raising capital.