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Oliver Kazunga  Acting Business Editor
BROKERAGE firm, MMC Capital projects said the equities market will this year maintain a bearish trend on the back of a prolonged economic underperformance underpinned by liquidity constraints that characterised much of 2014.According to an online publication, year-on-year, the industrial index lost nearly 20 percent in 2014 having pared off almost $1 billion in market capitalisation, reflecting a sick underlying economy and in its economic outlook for this year, MMC Capital said the trend was likely to persist.

“Locally, our view is that the market will likely remain under pressure this year on the back of poor operating fundamentals in Zimbabwe,” MMC was quoted as saying in a report.

“We still hold our view that investment opportunities in Zimbabwe remain plenty but funding will persist to be the biggest challenge for the economy in 2015 as most sectors continue to suffer from capital deficiencies.”

The World Bank sees Zimbabwe’s economy growing by 3,2 percent this year — faster than the global average — and pick up to 3,7 percent next year but MMC said liquidity constraints, falling industry capacity utilisation and waning government revenue would continue to be the major impediments.

The Confederation of Zimbabwe Industries (CZI) in its manufacturing sector survey report last year indicated that capacity utilisation in local companies declined from 39,6 percent to 36,3 percent.

The decline in industrial capacity utilisation was attributed to a number of factors among them liquidity constraints, antiquated machinery and intermittent power supplies.

“Our view is that the local market will likely remain under pressure on the back of poor operating fundamentals. Escalating economic headwinds will continue to hamper sustainable economic recovery. Economic Sectors to watch in 2015 include Construction, Electricity and Water,” it said.

It said equities market investors should consider investing in companies that have good corporate governance, solid fundamentals and foreign market exposure to cushion them from an underperforming economy.