LUSAKA Stock Exchange (LuSE)’s market capitalisation grew by 52 per cent in 2006, representing a K13 trillion increase from 11 per cent registered the previous year.
In dollar terms, the market capitalisation grew by 30 per cent to reach US3.2 billion.
Market capitalisation is the average value of all shares listed on the stock market and it varies as share prices grow and decline.
According to the end of year report released by LuSE marketing and public relations manager, Brian Tembo, growth in market capitalisation was due to capital gains experienced by most stocks like African Explosives Zambia (AELZ), Shoprite, Zambian Breweries and Farmers House Plc.
LuSE’s market size in relation to national gross domestic product (GDP) increased by 40 per cent compared to a reduction by 9.41 percent in 2005.
Commenting on trading activity, Mr Tembo said the number of trades in 2006 increased by 455 compared to 26 per cent in 2005.
He added that the number of shares transacted significantly increased as there were a number of block shares such as Cavmont Capital Holdings, which sold 25 per cent to a Namibian bank.
Investrust also released about 10 per cent of its shares on the market and a significant number of shares were transacted in Zambia Sugar, Zambeef and Farmers House.
He said the LuSE all share index ended the year poised to breach 2,000 points mark probably in the first quarter of 2007.
He cited listing of AELZ, Farmers House rights offer and listing of Cavmont Capital Holdings as some achievement of 2006.
Mr Tembo said this year promises to be a busy year for LuSE with a number of corporate debt instruments expected to be issued and several listings in telecommunications, agricultural, mining, banking and financial services sectors expected.
“The exchange is poised to have a bullish year with more listings than in any one year in its 13 years of existence,” he said.
Mr Tembo said LuSE has embarked on a restructuring process of its tier, an innovation designed as a nursery for new listings to allow companies that failed to meet current requirements to develop track record and satisfy the requirements.
He added that the restructuring process had taken longer than anticipated due to various parties involved in the consultation process.
He, however, stated that the restructured tier was anticipated to be functional this year.