Zim’s key equities index gains in longest streak in a year

0
40

JOHANNESBURG — Zimbabwe’s benchmark stocks index rose for a 15th day, its longest winning streak in a year, as investors speculated President Robert Mugabe’s government would put in place policies supportive of economic growth.

The 73-member Zimbabwe Industrial Index rose 0,7 % to 209,83, extending gains since September 17 to 12%.

Econet Wireless Zimbabwe, a mobile-phone operator, is leading gains on the gauge after an 18% increase since the rally started.

Delta Corporation, a unit of SABMiller that brews beer and produces soft drinks with the largest weighting on the index, has climbed 12%.

The gauge slumped to an eight-month low on September 5, falling 24% after reaching its highest level in more than four years on August 1.

Mugabe (89) won elections in July to extend his 33-year rule with threats to seize control of mines and banks from foreign and white investors and give them to black citizens and the government.

Zimbabwe will stick with an International Monetary Fund programme started in June that may help the country clear debts and restore the economy, Reuters reported October 6, citing Finance minister Patrick Chinamasa.

“The signs have been reasonably positive,” Brian Mugabe, an analyst at Imara SP Reid (Pty) Ltd, said by phone from Johannesburg.

“The government has put measures in place that would take the country forward. It also said it will keep on engaging with industry on harmonising of the indigenisation programme for what is best to industry.”

Foreign demand for equities is strong and a primary driver of the rally, Mike Barnes, the Johannesburg-based managing director of Securities Africa, a brokerage, said in an e-mailed response to questions.

After the post-election sell-off, many stocks became attractive to both local and foreign investors, he said.

The industrial 14-day relative strength index reached 79, the fourth day it traded above the level of 70 that indicates to some technical traders a measure is overbought.

There is “no sign that the rally will stop as demand remains strong across most stocks,” Barnes said.

—Bloomberg News