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Lockdowns negatively impact Capital Markets

The Capital Markets Association of Zambia (CMAZ) says lockdowns imposed by countries as a measure to contain Covid-19 have had a negative import on capital markets in the country.
Speaking in an interview with Money FM News, Association President Nicholas Kabaso said on the domestic market, the lockdown has posed a challenge of liquidity mobilization due other sectors not performing at their optimal level.
Mr Kabaso said looking at the comparison indicative index of the markets in terms of the Lusaka Securities Exchange (LUSE) the markets performance has been negative in the last 12 months now.
“If you where to look at the comparison of indicative index of the market in terms of the Lusaka Securities Exchange, you will see that the market has been negative for the last almost 12 months now,” he said.
Mr Kabaso noted that this is because the markets have a competitive market allocation in terms of fixed income instruments.
Mr Kabaso further said as long as the fixed income instruments such as Government Bills and Treasury Bills are lucrative in the capital market environment it affect activities on the Lusaka Securities Exchange because most people are looking at options either to buy government securities or invest their money in shares.
“Because People now are looking at options they are better off dealing with safer assets like buying government securities, or investing their money in the Lusaka Securities Exchange shares” Mr Kabaso explained.
“And what we are also seen is that because the pandemic has a toll on the overall micro economic environment, most of these listed companies, are also being affected and this means that the performance of the companies for the most part of this year will not be favorable a situation that worsens the outlook of participation of how many people will buy the securities.”

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