Market report WITH FUNGAI NYAUNGWA
The Zimbabwe Stock Exchange (ZSE) continued on a downward trajectory during the week ended August 30 2019, wiping out a billion dollars off total market capitalisation to close the week at $21,74 billion (-4.49%).
Equity benchmarks traded in the negative except for the Mining Index: The All Share Index shed 4.57% to at 166.36 points while the Industrial Index was down 4.65% to 553.59 points, lows last seen in May 2019. The Top 10 Index tumbled 6.13% to 148.96 points indicating that heavyweights were most affected during the week’s bloodbath.
The Mining Index inched up 0.97% to 261.66 points as gains in Bindura Nickel Corporation of 5.71% outweighed losses in RioZim Limited of 7.57%. Year-to-date the market is up 13.76% as measured by the All Share Index.
The week’s top gainer was Willdale, which recorded gains of 45.35% in a block trade which saw 4,991,300 shares changing hands. During the week under review, the company published a trading update for the quarter ended June 30 2019, indicating that revenue growth of 285% was driven by 26% volumes growth and that profitability remains ahead of prior year and budget.
Another top mover was Mashonaland Holdings, up 16.82%. The company in its trading update for the quarter ended June 30 2019, highlighted that revenue was up 40% while operating profit grew 127% on account of improved occupancy rate at 77% from 73% during the prior comparable period.
NMB Holdings saw a 12.50% uptick in price following a profit warning statement signifying an improvement in basic earnings per share by 522% on account of fair value gains and translation of forex balances as a result of the changes in functional currency. The biggest loser was Simbisa Brands which shed 22.58%, followed by retailers OK Zimbabwe Axia and Powerspeed Electrical, down 17.83%, 16.08% and 13.19% respectively.
Volumes activity was mainly concentrated in Simbisa Brands which contributed 25.90% to total volumes. A total of 39,097,758 shares traded during the week. Total turnover was $31,421,195, a 38.44% increase from the previous week’s $22,695,926. Turnover was largely dominated by Delta Corporation which contributed 31.82% to total turnover.
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Among the heavyweights, Delta Corporation traded 7.22% lower to close the week at $3.0939, with 3,193,200 shares worth $9,998,984 trading. Econet Wireless Zimbabwe, Cassava Smartech and Innscor Africa declined 3.12%, 2.79% and 5.73% respectively. Fungible counters were not spared during the sell-off: Old Mutual was down 5.41% to $17.5000 on trades worth $2,604,550 while PPC Limited fell 8.90% to $2.0041 on trades worth $568,620. In an operational update, PPC Limited management emphasized that group EBITDA increased by between 5 to 10 % during the four months ended 30 July 2019, detracted by once-off restructuring costs.
The buy-in that took place on the last day of the trading week may signal renewed interest on the local bourse as investors try to take advantage of new lows, however in the absence of liquidity, the short-term outlook still looks bleak.
Fungai Nyaungwa is an equities analyst.
