As half year results for listed firms trickle in, market analysts say results are mixed largely due to the macroeconomic environment.
In separate published statements, Icon Properties plc, Mpico plc and National Investment Trust LimitedPlc (Nitl) indicated they posted profits in the first half of this year.
Icon posted a profit after-tax of K2.5 billion while Nitl has chalked a profit after-tax of K672 million, down from K1.4 billion during the same period last year due to share price losses on most of its invested companies.
Market analyst Armstrong Kamphoni, who is also Cedar Capital chief executive officer, said in an interview yesterday the year has so far been characterised by some level of “irrational” excitement.
He said, the market, during the period, has taken a battering from correction of the likes of First Capital Bank, whose acquisition of Barclays Zimbabwe created a storm as it coincided with the ousting of the Zimbabwe ex-president Robert Mugabe.
“Going forward, we think some stocks might remain resilient, but the fear that the correction in the highlighted counters is far from over and might have a bearing on the index,” he said.
Kamphoni said economic fundamentals notably interest, inflation and exchange rates were also conducive during the review period.
During the quarter, inflation maintained its single digit status and is currently at 9.5 percent as of August, according to National Statistical Office (NSO) figures.
The commercial banks’ rate of borrowing also inched downwards from about 16 percent to an average of 13.5 percent with the kwacha largely remaining stable against major trading currencies.
Said Kamphoni: “The economic environment helped the rise in the index as growing pension funds were switched from low interest rates to stocks.
“This combined with other factors led to the market heating up where some of the heavyweight stocks were simply overvalued; hence, the correction.”
A Blantyre-based market analyst noted that economic conditions largely impacted the performance of most companies.
“Equity market prices on some counters have probably peaked with little upside as seen by low returns compared to previous years. “On the other hand, low interest rate environment is positive for overall economic growth in the medium-term,” he said.