Market Report WITH FUNGAI NYAUNGWA
The Zimbabwe Stock Exchange (ZSE) continued on a downward trajectory for the fourth week in a row during the three- day trading week ended August 16, 2019.
The local bourse wiped out a further $93 million (-0,40%) to close at a total market capitalisation of $23,43 billion. All equity gauges except for the Mining Index traded in the red: the All Share Index lost 0,19% to settle at 179.70 points, while the Industrial Index eased 0,23% to 599.18 points. The Top 10 Index shed 0,61% to end the week at 165.66 points. The Mining Index at 248.74 points traded 1,61% higher on the back of a 4,76% increase in the price of Bindura Nickel Corporation. Last week the company notified the investing public of a sale and purchase agreement between major shareholder ASA Resource Group and a local mining entity relating to ASA’s 74,73% stake in Bindura Nickel Corporation. Year to date, the market is up 22,88% as measured by the All Share Index.
Twenty-eight counters traded last week, of which 11 recorded gains while four saw losses. Zimre Property Investments led the risers, gaining 11,55% last week, followed by First Capital Bank Limited and PPC Limited, which were up 9,38% and 5,52% respectively. During the week, First Capital Bank highlighted in a profit warning statement that the company’s basic earnings per share will rise to 2,5c per share from 0,63c due to once off property valuation adjustments. It is interesting to note that SeedCo International inched up 1,18% after CEO Morgan Nzwere announced at the annual general meeting held on the Thursday that the company had acquired an 80% stake in Alliance Seeds, a vegetable seed company in South Africa. The biggest loser was Econet Wireless Zimbabwe which shed 3,70% to close at $1,30. Other losses were seen in Innscor Africa Limited, down 2,92%, OK Zimbabwe Limited, down 0,44% and Cassava Smartech, down 0,19%.
Volumes activity was mainly concentrated in CBZ Holdings Limited which contributed 25,83% to total volumes. A total of 14,474,800 shares changed hands, a 29,96% decline from last week. Total turnover for the week was $20 239 000 while average daily turnover at $6 746 333 was 25,06% higher than the previous trading week. Turnover was largely dominated by trades in Old Mutual Limited contributing 28,46% to total turnover.
Among the heavyweights, Delta Corporation traded unchanged at $3,46, with 1,562,300 shares worth $5 405 558 shares trading. Fungible counters continued to trek upwards: Old Mutual Limited was up 1,70% to $21,7222 on trades worth $5 760 345 while PPC Limited inched up 5,52% to $2,10 on trades worth $11 760.The increase in supply of Old Mutual shares appears to be stemming from new shares that have vested, and these continue to facilitate the exit of willing foreign participants.
Local investors appear to be chasing after liquidity, pushing prices on the stock market downwards. On the other hand, the availability of Old Mutual Limited scrip will most likely continue to drive foreigners back on to the market. As such, the ZSE is expected to trade sideways to weak, during the week ahead.
Fungai Nyaungwa is an equities analyst.
