ZSE in post budget cheer
EQUITIES on the local bourse recovered last week due to postbudget investor cheer which saw the market close in a bullish mood.
All the benchmarks closed the week to Thursday in the black.
The primary indicator, the ZSE All-Share Index, increased three percent to 161,19 points while the Top 10 Index rose four percent to 166,08 points on gains in the market’s heavyweights.
At 208,56 points, the Mining Index of three active counters was 2,4 percent above prior week levels on gains in diversified resources group — RioZim.
On November 22, Finance and Economic Development Minister Professor Mthuli Ncube delivered his 2019 National Budget Statement themed “Austerity for Prosperity”, laying the foundation for economic growth.
Among the main highlights of the fiscal policy was a forecast gross domestic product (GDP) growth of 3,1 percent.
However, the projected $1,6 billion budget deficit has left some economists uncertain of Government’s sincerity to curtail spending.
Other key issues around currency policy were not adequately addressed, thereby leaving the economy battling with a multi-pricing regime.
Additionally, economists also contend that any reforms must foster production and enhance exports to boost the country’s foreign currency earnings and address key economic enablers such as the availability of fuel.
These, among others, will see the country fulfil plans of becoming an upper middle class economy by 2030.
During the week under review, total market value rose four percent to close at $17,232 billion from the prior week’s $16,5 billion.
The market’s top capitalised counters were the main value drivers.
Hospitality group RTG put on 20 percent to close at 1,92 cents. Biggest stock by market capitalisation, Econet, rose 10 percent to $1,80 from $1,62 in the prior week.
The telecoms giant’s subsidiary, Cassava Smartech, last week launched an education insurance cover product called “Enda Education Cover” that is underwritten by Econet Life, Cassava Smartech’s Insurtech arm.
The product offers school fees benefits for primary and secondary education in the event of the death of a breadwinner or a legal guardian of the student.
This is in addition to introduction of the FCA Ecocash wallet as the group continues to leverage on mobile money services.
Industrial conglomerate Innscor added 6,9 percent of value to close at $1,94 while National Foods rose 2,4 percent to $6,76.
Also on the upside, Simbisa Brands rose 4,2 percent to 75 cents.
The quick service restaurant (QSR) group indicated at its annual general meeting that earnings for the first quarter of the 2019 financial year were ahead of prior year targets.
Crocodile breeder Padenga advanced three percent to 95 cents while Nampak rose 2,3 percent to 21,5 cents.
The packaging material manufacturer reported that profit for the year to September jumped 89, 3 percent to $14,5 million from $7,6 million in the prior period despite a difficult operating environment compounded by foreign currency shortages.
Revenue steadily rose 21,3 percent to $116, 8 million, buoyed by exceptional performance from its operating units MegaPak, Softex tissue products, Hunyani and CarnaudMetalbox.
The company attributed the improved performance to volume growth, tight cost control and a good tobacco season.
Beverages maker Delta rose by a marginal 0,9 percent to $3,28.
Further gains were offset by losses in Meikles that came off 15 percent to 51 cents.
Insurance firm Fidelity let go of 12 percent to 15,75 cents while Bindura retreated 0,8 percent to 7,02 cents.
Afdis, Falgold and Hippo remained flat at $1,60, 2,5 cents and $1,70 respectively.
Hippo reported that revenue for the six months to September 30, 2018 increased 29 percent to $93,2 million from $72,4 million in the same period in the prior year, underpinned by increased sugar production which was 13 169 tonnes more than prior year, a 12 percent increase in domestic demand for sugar.