The bull run on the Zimbabwe Stock Exchange continued on this week, buoyed by blue chips as records continue to tumble after the industrial index and the market capitalisation reached milestones of 500 points and $14 billion, respectively, during the week.
Weekly gains in heavyweights, Econet and Delta, pushed the industrial index higher, gaining 5,91 percent week-on-week since Thursday last week to close at 515,95 points. Telecoms giant Econet added 12,42 percent to close trading yesterday at $1,8111 and beverages group, Delta added 9,28 percent to trade at $3,0597. Seed Co gained 0,56 percent to close at $2,9025.
Offsetting the gains in the industrials this week were losses in some top tier counters. Innscor shed 0,21 percent week-on-week to settle at $1,7827. British American Tobacco lost 2,26 percent to settle at $35,6 while quick service restaurants group, Simbisa Brands lost 2,66 percent to close at $0,6814.
The mining index lost 3,2 percent week-on-week to close at 133,12 points after nickel miner, Bindura Nickel Corporation, dropped 18 percent during the week to settle at $0,0533. RioZim gained 6,01 percent to close at $1,1025. Hwange Colliery and Falcon Gold remained unchanged at previous trading levels.
Weekly turnover amounted to $55,7 million after the local bourse had record breaking turnover of $30,5 million on Thursday. Foreigners were net sellers during the week with buys amounting to $19,5 million and sales of $28,8 million.
Market capitalisation increased by $800 million during the week to close trading yesterday at $14,6 billion. It added $2,7 billion in October alone.
The market has seen sustained growth in the value of top tier stocks despite analysts having earlier anticipated activity to have moved to mid tier stocks by now, with the logic that the market would move from the overvalued blue chips to the less overvalued mid tier stocks. Valuations based on balance sheet figures have failed to compromise punters' interest in blue chips because such valuations are not what drove the investors into the market in the first place.
Before the bull run, most stocks on the local bourse were technically undervalued as investors' appetite for local stocks was subdued owing to the weak fundamentals in the economy. Although the economy is not better off than it was then, there is more demand for stocks simply because investors have been cornered into the local stock market to preserve their wealth.