In­vestors cau­tious on the ZSE

The Sunday Mail (Zimbabwe) - - BUSINESS NEWS - Enacy Ma­pakame

IN­VEST­MENT on the eq­ui­ties mar­ket re­mained sub­dued last week as the cur­rent bout of com­pany earn­ings for half year or quar­terly per­for­mances failed to in­spire trad­ing vol­umes on the Zim­babwe Stock Ex­change (ZSE).

The op­ti­mism that gripped the econ­omy fol­low­ing the an­nounce­ment of Fi­nance Min­is­ter Mthuli Ncube’s fis­cal mea­sures is slowly be­ing re­placed by pes­simism as the econ­omy con­tin­ues to bat­tle for­eign cur­rency short­ages.

In the past week, sev­eral listed com­pa­nies re­leased half year re­sults as well as quar­terly trad­ing up­dates that show growth in both vol­umes and prof­itabil­ity. How­ever, lim­ited for­eign cur­rency short­ages had an ef­fect on op­er­a­tions.

Re­sul­tantly, the fi­nan­cials failed to add enough spark to the stock mar­ket, which usu­ally ben­e­fits from strong cor­po­rate earn­ings as in­vestors take po­si­tions in per­form­ing coun­ters.

In the week to Thurs­day, all bench­marks, ex­cept the Min­ing In­dex, closed the week in the neg­a­tive. To­tal mar­ket cap­i­tal­i­sa­tion fell 5,1 per­cent to $16,5 bil­lion. The pri­mary All share In­dex slipped 2,41 per­cent to 157,3 points while the ZSE Top 10 closed the week 3,8 per­cent weaker at 159,66 points. At 528,08 points, the In­dus­trial in­dex closed the week 2,44 per­cent lower than prior week’s 541,34 points. The Min­ing lndex of three ac­tive coun­ters re­mained flat at 208,71 points.

In the week un­der re­view, largest stock by mar­ket cap­i­tal­i­sa­tion Econet shed 12,7 per­cent to US$1,57 from prior week’s US$2,08. The tele­coms gi­ant’s sub­sidiary Cas­sava Smartech launched a plat­form that en­ables its mo­bile sub­scribers to open bank ac­counts us­ing their mo­bile phones.

In­dus­trial con­glom­er­ate Innscor slipped 3,9 per­cent to US$1,87 amid rev­e­la­tions that the group’s op­er­a­tions are se­verely af­fected by for­eign cur­rency short­ages. Innscor has in­ter­ests in var­i­ous sec­tors but pre­dom­i­nantly in food pro­cess­ing. Its sub­sidiaries in­clude Na­tional Foods. In a trad­ing up­date for the first quar­ter of fi­nan­cial year 2019, the flour milling unit did well but has been ex­pe­ri­enc­ing dis­rup­tions that threaten the smooth flow of op­er­a­tions.

The coun­try’s wheat re­quire­ment is pre­dom­i­nantly im­ported and last week, Nat­foods in­di­cated in a state­ment that it was due to close its mills in Harare and Bu­l­awayo due to sup­ply chal­lenges.

But Innscor chair­man said the whole group is en­gag­ing Gov­ern­ment to chart a way for­ward on the for­eign cur­rency short­ages. Month on month, the mar­ket weak­ened as all key in­di­ca­tors closed Novem­ber in the neg­a­tive. To­tal mar­ket value fell 4,08 per­cent to US$17,4 bil­lion while the pri­mary All Share In­dex closed 2,09 per­cent lower to 160,4 points.

The in­dus­trial In­dex gave up 2,04 per­cent to 538,66 points while the Min­ing In­dex suc­cumbed 4,04 per­cent to 208 points on losses in RioZim and Bin­dura that fell 5,26 per­cent and 1,13 per­cent re­spec­tively .

At 164,98 points, the Top 10 In­dex was 1,49 per­cent lower than prior month.

To­tal turnover fell 22,37 per­cent to US$118,03 mil­lion, with av­er­age daily trades of US$5,37 mil­lion re­alised dur­ing the month. Sig­nif­i­cant value driv­ers were Old Mu­tual, Afdis and Econet that con­trib­uted 20,37 per­cent, 19,27 per­cent and 17,36 per­cent re­spec­tively.

To­tal vol­umes went down 51,33 per­cent af­ter 153,88 mil­lion shares ex­changed.

Head­lin­ing ris­ers for the month was Rain­bow Tourism Group (RTG), which went up 37,93 per­cent; fol­lowed by First Mu­tual Prop­er­ties that rose 25,57 per­cent. Bank­ing groups NMB Bank and ZBFHL went up 20 per­cent and 19,34 per­cent re­spec­tively while Delta put on 13,50 per­cent.

Big­gest losses were recorded in African Sun that went down 32,20 per­cent fol­lowed by First Mu­tual Hold­ings that let go of 24,41 per­cent of value.

Hippo, Meik­les and Edgars also de­creased 23,88 per­cent, 23,19 per­cent and 20 per­cent ac­tiv­ity. Go­ing for­ward, con­sumer and re­tail stocks are ex­pected to be sus­tained by ad­di­tional pur­chas­ing power granted to the civil ser­vice in the form of bonuses, re­sul­tantly cush­ion­ing the low­er­ing de­mand.

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