HARARE — The Zimbabwe Stock Exchange (ZSE) recorded the highest annual turnover since dollarisation, amounting to $694,8 million in 2017, buoyed by a huge sell-off which took place in November following the political upheaval that saw the end of former president Robert Mugabe’s 37-year reign.
Analysts said Mugabe’s resignation after a military takeover in November precipitated the profit taking, which drove turnover to its highest level as investors envisaged the end of a bullrun that started in October last year.
In November, the local bourse recorded a total monthly turnover amounting to $207,5 million, which accounts for 30% of the total turnover recorded in the year.
In the same month, Zimbabwe’s equities dropped $6 billion in eight days, starting from November 15, as the market went into a drastic self-correction following a change of guard in the country’s political leadership, which saw Emmerson Mnangagwa installed as the new president on November 24
The mainstream index gained 130,42% to 333,02 points in the year while the mining index also advanced 143,38% in the same period, as equities soared on currency risk.
Prior to the change in leadership, both ZSE indices were on an upward trajectory since the start of a stock market bull run, which began in October last year on currency risk when investors lost confidence in the monetary system attributable to the introduction of bond notes.
Market capitalisation rose by 139% in the year to close at $9,6 billion, attributable to gains recorded by all heavyweights.
The average monthly turnover increased from $16,15 million in 2016 to $57,9 million in 2017.
The largest company by market share, Delta, advanced 80,79% to close at 160 cents. Telecommunications giant, Econet added 207,2% to settle at 92,16 cents. Padenga, Old Mutual and Innscor advanced 241,94%, 58,09% and 108,33% to close at 54,71 cents, 552,06 cents and 100 cents in that order.
National Foods and BAT were up 80,43% and 134,1% to settle at 650 cents and 3 570,05 cents respectively, while Seedco advanced 98,02% to close at 200 cents in the year under review.
Simbisa and Hippo also picked up 193,75% and 402,86% to close at 47 cents and 176 cents respectively in the year.
On the top five gainers, GBeltings led the movers pack, advancing 900% in the year to close at 0,8 cent.
ZB Financial Holdings and Nampak put up 696,46% and 650% to settle at 36 cents and 18 cents respectively. CFI and Hippo also landed in the top five after adding 626,39% and 402,86% in the year to close at 70,75 cents and 176 cents respectively.
Only three companies recorded losses in the year. RTG was the worst performer in the year after shedding 16,67% to close at 1 cent while Edgars and Turnall lost 16,25%and 8,65% to settle at 4,02 cents and 0,95 cent in that order.
On the mining space, Bindura and Riozim pushed the resource index high after their share prices rose 38% and 300% to close at 5,52 cents and 120 cents respectively.
Falgold also added 266,67% to 2,2 cents while Hwange also gained 26,67% to close at 3,8 cents.
Foreign participation remained subdued in the year, with 30% of the trades in 2017 being foreign trades, down from the 52% recorded in 2016.
Foreigners were net sellers in the year, having bought shares worth $157,8 million ($60,264 million in 2016) and sold shares worth $258,7 million ($140,3 million in 2016), reflecting diminishing appetite for local shares.
However, in December foreigners were net buyers, purchasing shares worth $11,7 million compared to sales worth $6,7 million, a position which analysts say was mainly driven by Old Mutual as investors bet on the ongoing restructuring exercise which will see the company separating into four business units, each listed separately.
As such, the local bourse recorded a net outflow of $100,8 million, a position which continues to put pressure on the bank nostro accounts at a time when the economy is faced with cash challenges.
Mnangagwa’s administration remains on the spotlight as investors closely observe the unfolding political and economic reforms to ascertain whether the outlook is bright or otherwise.
Analysts say Zimbabwe’s equities are still overvalued and a positive outlook will see the market correcting from the bull run that lasted all of November.
Such self-correction will see share prices falling in the short to medium term on profit taking as the speculative demand for equities, which was driving the bull run, weakens.