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Buyers continue to outpace sellers on the ZSE

By Fungai Nyaungwa

Equities edged up further during the week ended 31 May 2019, as the Zimbabwe Stock Exchange (ZSE) total market capitalisation rose 18.50% to close the week at $24,919,955,295, up from last week’s $21,030,196,647. Buyers continued to outpace sellers on the local bourse, as the RTGS continued to depreciate on the formal interbank market, where it’s now being exchanged for the USD at a rate of 5,26 (up from 4,76 on Friday last week). All equity gauges recorded a positive outturn this week: The All Share Index and the Top 10 Index rose 17,73% and 20,20% to close the week at 188.07 points and 182.99 points respectively. The Industrial Index advanced 17,63% to 628.61 points, highs last seen in October 2018. Mining counters were 17,69% higher at 225.81 points, on the back of gains in Bindura Nickel Corporation, up 60% and RioZim Limited, up 4%. Year to date, the ZSE is up 28,6% as measured by the All Share Index.

Zimre Holdings Limited (ZHL) led the risers with a 86,67% gain this week to close at $0.0420 on trades in 474,987 shares. The company issued a further cautionary statement relating to a potential transaction at subsidiary level which once completed may have a material impact on the company’s share price.
Also, investor interest may have been sparked by the successful completion of ZHL unit Zimre Property Investments’ new Sawanga Mall in Victoria Falls, amidst indications that ZPI intends to float a $16m bond for its second student accommodation project in Bulawayo. Other significant gains were recorded in Bindura Nickel Corporation, up 60% and Star Africa Corporation, up 33,33%. OK Zimbabwe closed the week 25% firmer at $0.4500, after issuing a final dividend of 1.71c per share with respect to the year ended March 31, 2019. The company is scheduled to release its full year results this coming week. Losses for the week were seen in Zimbabwe Newspapers and NMB Holdings Limited which shed off 11,31% and 5,10% respectively.

Volumes activity was mainly dominated by a block deal in GetBucks Microfinance Bank, where 5,573,916 shares were traded. The company is seeking to raise $5,007,681 through a rights offer underwritten by GetBucks Limited and Zahra Investment Trust, in a bid to expand its existing loan offerings as well as to grow the bank’s assets. Econet Wireless Zimbabwe and Delta Corporation also contributed significantly to total volumes at 11,37% and 11,10% respectively. A total of 32,094,448 shares changed hands during this week’s trading session, a 30,02% decline from 45,865,567 shares traded during the previous week.

Total turnover at $42,631,701 was down 27,75% from last week. Turnover was largely driven by trades in Delta Corporation which contributed 28,98% of total turnover, followed by Old Mutual Limited (28.30%) and Econet Wireless Zimbabwe Limited (15.67%).

Among the heavyweights, Delta Corporation gained 20.36% this week to close at $3.6107, with a total of 3,563,034 shares worth $12,352,606 being traded. The shares of Econet Wireless and Cassava Smartech rallied a further 26.40% and 24.42% respectively. Both companies have since sort an extension from the ZSE to pubish their results for the year ended February 2019 by the end of June 2019. Fungible counter Old Mutual advanced 19.04% to close the week at $13.9926, with shares worth $12,066,488 changing hands. The Old Mutual Implied Rate (OMIR) closed the week at 8.9673, up from 7.8604 last week. During the last cabinet meeting, members resolved to deal with the fungibility of the Old Mutual stock, to curtail rising prices as the parallel market is said to be tracking the Old Mutual Implied Rate. We await to see the measures put in place to deal with this development.

While buyers continue to scout for stocks on the local market, supply in some counters seems to be drying up as investors hold on, as a store of value during this inflationary period. We, however, expect demand across the board, particularly in the top tier counters, will continue to push prices up in the coming week. — Akribos Research

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