Zimbabwe: Trading Up As Demand Returns to the ZSE

The Zimbabwe Stock Exchange (ZSE) traded slightly up during the week ended July 12 2019, as demand returned to the local bourse. This comes after Finance and Economic Development minister Professor Mthuli Ncube indicated that civil service salaries would be reviewed upwards, sparking fresh inflation fears.

In addition, the uninspiring money market rates which fall behind inflation, after the Reserve Bank of Zibabwe hiked its overnight lending rates to 50% could have spurred the renewed buying interest on the stock market. Total market capitalization added $289 million to close the week at $25,062 million. All equity gauges ended the week in the black: the All Share Index and the Industrial Index gained 0.68% and 0.69% to close Friday's trading session at 189.98 points and 633.92 points respectively. The Top 10 Index advanced 1.33% to 180.94 points an indication that the heavyweights were most sought after during this week's buy-in. Mining stocks closed at 248.97 points, 0.19% higher on a 0.27% gain in RioZim Limited. Year to date, the market is up 29.91% as measured by the All Share Index.

For the second week in a row, Powerspeed Electrical led the risers, gaining 20%. Old mutual Limited, up 10,59% and SeedCo Limited, up 6,63% also saw notable gains. The biggest loser was Zimre Holdings Limited which shed 26.38%. The company published a further cautionary statement this week, indicating that the company is still in negotiations for a transaction at subsidiary level which may have a material impact on ZHL's share price. Other significant losses were recorded in Truworths and First Mutual Properties which were down 19,92% and 19,23% respectively.

The ZSE was rather quiet this week, when compared to the previous weeks. Volumes activity was dominated by trades in CBZ Holdings Limited, which contributed 26,12% to total volumes, followed by Dairibord Holdings Limited (16,92%) and Delta Corporation Limited (11,19%). A total of 30,499,100 shares changed hands during this week's trading session, a 35.85% decrease from the 47,544,065 shares traded during the previous week.

Total turnover during the week was $39,987,051, a 17.36% decline from the $48,384,946 recorded last week. Turnover was largely driven by activity in Delta Corporation Limited, Old Mutual Limited and PPC Limited which contributed 29.91%, 17.44% and 10.82% to total turnover respectively.

Among the heavyweights, Delta Corporation advanced 1.70% to $3.5100 as 3,414,000 shares worth $11,958,723 traded. Econet Wireless Zimbabwe added 5.88% to close the week at a price of $1.6195, while Cassava Smartech saw a marginal uptick of 0.36% to $1.6500. Innscor Africa shed 0.27% to $2.2500. Fungible counters saw significant trades this week, despite the recent introduction of the 90 day vesting period on trading in dual listed counters. Old Mutual Limited was up 10.59% to $15.4824 with turnover of $6,973,245 while the share price of PPC Limited declined 2.11% to $1.8600 with turnover of $4,327,290. The Old Mutual Implied Rate ended the week at 9.7481, up from 8.9072 last week.

Fungai Nyaungwa is an equities analyst at Akribos Securities. She can be reached on nyaungwaf@akriboscapital.com or via telephone on 0242 301201.

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