The Sunday Mail
THE Zimbabwe Stock Exchange (ZSE) was flat in July, rising a marginal 1 percent in the latter stages of the month on reports that China might extend a bailout package for the local economy.
The reports helped “prop up the fundamental aspects of the local bourse”.
Brokerage EFE Securities notes that the mining index rose more than 36 percent in July to 83.27 points, the highest in two years, driven by Bindura Nickel Corporation(BNC) whose interim financial performance was more than forecast.
Year to date, the mining index is up 83 percent, while year-on-year the index has climbed 42 percent.
Interestingly, three of the four listed mining stocks – Falgold, RioZim and Hwange – declined.
BNC, however, returned 325 percent in the seven months to July.
Econet led in turnover contribution at 23 percent followed by Delta at 20 percent.
Foreigners accounted for 75 percent of the total purchases in Econet and also accounted for significant trades in Delta, underlying continued investor interest in blue-chip stocks.
On the overall, month-on-month turnover dropped 12 percent to US$25,2 million and declined 42 percent on a year-on-year basis.
The decline was in tandem with the fall in local demand due to the biting cash shortages.
However, foreign inflows went up 4 percent to US$15,6 million on renewed foreign interest in blue-chip stocks.
Five of the top traded stocks by value were all heavily capitalised counters and were mainly purchased by foreigners who splashed 83 percent of their funds among the preferred counters.
On aggregate, foreigners accounted for 62 percent of turnover, representing an 18,2 percent improvement on the prior month, while foreign portfolio disposals were minimal at $4,8 million to record the least monthly outflows year to date.
The market enjoyed continued buoyancy in the month under review as all stocks registered double-digit growth while three counters more than doubled in value.
News that Star Africa’s Harare refinery would resume sugar refinery operations saw the group topping the monthly gainers after rallying 187,5 percent and closing last week at US2,3c.
Falgold’s plans to dispose of the assets, along with liabilities of underperforming Dalny Mine, saw the gold miner climb 120 percent to US3,3c.
Investment holdings company TA also rallied 100 percent to US16,02c following notice of a proposed minorities buyout by current major shareholders Masawara, which is expected to be done at buyout price of US20,6c.
Bindura sustained the momentum from the prior month with a gain of 77,1 percent as investors warmed up to reports of the resuscitation of the nickel refinery.
BNC’s operations have turned around after resuming mining and nickel exports. The miner was largely under care and maintenance since 2008.
ZBFH, Masimba and NMBZ were amongst the other gainers, adding 75 percent, 37,4 percent and 33,3 percent over the month under review to see their prices settle at US7c, US2,4c and US6c respectively.
Market watchers say the 13 percent increase in broad money supply from US$3,5 billion to US$4,3 billion in June last year on the back of an increase in deposits and domestic credit were likely to lift both the market and the economy.
