Market Report WITH FUNGAI NYAUNGWA
The Zimbabwe Stock Exchange (ZSE) continued to trek upwards during the week ended September 20 2019, adding $3,94 billion to total market capitalisation to close at $26,65 billion (+18,17%).
During the week, Zimstats published official month-on-month inflation figures, which showed that the prices of goods and services in Zimbabwe went up by 18,07% on average during the month of August 2019. This growth was slower than the 21,04% registered in July 2019. Another interesting phenomenon was the rapid rise in the parallel market rate for the US$, from around US$1:ZWL15.70 at the end of the previous week to around US$1:ZWL20.50 at the end of the week under review, indicating a sharp depreciation of the recently introduced Zimbabwe dollar against major currencies. These kinds of occurrences have a large impact on business, for example, the upward movement in the exchange rate which continues to push prices upwards results in constant contract re-valuations in an attempt to preserve value. This has affected companies like Zimre Property Investments as they highlighted in their recently released results for the half year ended June 30 2019. For the market, this may have just triggered another bull run.
Market benchmarks edged up: the All Share Index was up 17,76% to 196.37 points while the Industrial Index ended the week 18,03% higher at 654.89 points. The Top 10 Index advanced 21,84% to 182.38 points, highs last seen in July 2019. The Mining Index remained unchanged at 262.50 points. Year-to-date, the market is up 34,28% as measured by the All Share Index.
A total of 26 counters traded in the positive during the week, compared to only one company trading in the negative. First Mutual Limited led the risers, with a 43,48% jump. Other notable gains were seen in SeedCo, Simbisa Brands and OK Zimbabwe, which added 35,04%, 31,89% and 31,73% respectively. The only decliner for the week was Zimre Holdings, down 11,40%, on small value trades worth $5 157.
Activity was quite spread out amongst a number of counters. FBC Holdings, First Capital Bank and Mashonaland Holdings dominated volumes activity, collectively contributing 46,18% to total volumes. Total turnover at $35 181 277 was 9,39% lower than the $38 827 755 seen during the previous trading week. Turnover was largely concentrated in Old Mutual (19,22%), SeedCo (12,61%) and FBC Holdings (12,60%).
Among the heavyweights, Delta Corporation, Econet Wireless Zimbabwe and Cassava Smartech rose 25,05%, 22,77% and 16,64% respectively. Trading in fungible counters remained bullish: Old Mutual traded 34,57% up to a new high of $33.7000 with shares worth $6 762 440 changing hands. PPC Limited added 20% to $2.46000 on trades worth $126 814. The Old Mutual Implied Rate closed the week at 20.5246 from 17.3258 the previous week.