Zimbabwe: ZSE Tumbles As Equity Benchmarks Trade in the Negative

analysis

The Zimbabwe Stock Exchange (ZSE) tumbled further during the week ended August 23 2019. During the week, Zimstat revealed that month-on-month inflation for the month of July 2019 was 21.04%, down from the June 2019 figure of 39.26%, an indication of a slowdown in the rise of prices.

Also, the Reserve Bank of Zimbabwe invited bids for $60 million worth of 365-day Treasury Bills, which turned out to be oversubscribed, with total bids of $121 million, at an average rate of 14.37%. The local bourse shed $661 million (-2.82%) to close at a total market capitalization of $22.76 billion. All equity benchmarks except for the Mining Index traded in the negative: the All Share Index was down 2.99% to 174.33 points while the Industrial Index lost 3.10% to settle at 580.60 points. The Top 10 Index eased 4.21% to 158.69 points and the Mining Index advanced 4.19% to 259.15 points. Year-to-date, the market is up 19.21% as measured by the All Share Index.

The week's top gainer was First Mutual Properties which gained 20.00% followed by Dawn Properties , up 15.50% and RioZim Limited, up 4.85%. Simbisa Brands Limited was the biggest loser, shedding 21.07%. Other notable losses were seen in Powerspeed Electrical which fell 20.00% and Edgars Stores Limited, down 14.08%. The price of NMB Holdings Limited remained unchanged, despite a profit warning statement indicating that basic earnings per share for the half-year ended June 2019 will be approximately 14.55c per share, compared to 2.34c per share during the prior comparable period on account of fair value gains and translation of forex balances as a result of the changes in functional currency. During the week under review, trading in Hippo Valley Estates shares was suspended, after the company failed to comply with ZSE listing rules relating to the publishing of its financials.

Volumes activity was mainly concentrated in Edgars Stores Limited which contributed 55.38% to total volumes. A total of 32,750,400 shares changed hands during the week. Total turnover was $22,696,926, a 12.14% increase from the previous week's $20,239,000. Turnover was largely dominated by trades in Delta Corporation and Old Mutual Limited which contributed 27.63% and 21.46% to total turnover respectively.

Among the heavy weights, Delta Corporation traded 3.62% lower to close the week at $3.3347, with 1,831,800 shares worth $6,270,693 trading. Fungible counters traded mixed: Old Mutual Limited fell 14.83% to $18.5000 on trades worth $4,869,685 while PPC Limited gained 4.76% to $2.2000 on trades worth $158,360. In search of liquidity, we anticipate the current sell-off will continue and as such, the ZSE will likely trade lower during the week ahead.

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