The Sunday Mail
SUSTAINED interest in stocks, especially after the introduction of bond notes, helped drive the Zimbabwe Stock Exchange’s industrial index by 35,5 percent to 195,97 points in the half-year to June 30, 2017.
The rally, which has continued despite cash shortages, began in the last quarter of 2016.
Market watchers say the lack of investible options — worsened by an underwhelming money market — has largely driven investor appetite for equities.
As a result, market capitalisation — a measure of the total value of ordinary shares in issue — has scaled close to post-dollarisation record highs.
By the end of June, the total market cap, which opened the year on US$3,9 billion, stood at US$5,7 billion — US$300 million shy of the post-2009 high of US$6 billion.
Shares worth US$115 million changed hands between January and June, 29 percent more than US$89,2 million in the same period in 2016.
Overall, 192 million shares were bought by foreign investors in the review period compared to 368 million last year.
Big caps like Delta, Innscor, Econet and BAT — considered traditional hedge stocks — dominated trades.
The World Bank expects the economy to grow 3,8 percent this year before tapering off to 3,4 percent in 2018.
Economist and MD Oxlink Capital Mr Brains Muchemwa said last week that though most counters were seemingly trading below net asset values, their assets were not sweating enough to generate decent earnings.
He also noted that portfolio managers were channelling investments to the stock market.
“In the absence of clear positive outlook on earnings, moreso at a time revenues and profitability levels have been coming down and are expected to remain depressed, the most plausible driver behind the ZSE rally would be ballooning monetary balances.
“The prolonged shortages of cash and foreign currency have, over the period, resulted in un-utilisable bank balances that are now being channelled towards the equities market, resulting in the market finding more buoyancy,” he said.
Best regional performer
June 2017’s largely bullish trend on ZSE means turnover at US$39 million was the highest since September 2014, making the mainstream industrials index the best regional performer ahead of Nigeria, Lusaka, Mauritius and Nairobi exchanges that gained six; 3,74; 2,61, and 2,09 percent respectively, according to African Financials, a report service for listed companies in Africa.
Top traders of the month were market heavies Econet, Delta, Innscor, Seedco and Lafarge.
Masimba Holdings led risers, gaining 100 percent to USc4,80 after nearly nine million shares were traded. Packaging group Nampak saw a 56 percent jump to close the month at USc5, followed by insurance firm First Mutual, which rose 51 percent to USc10.
Powerspeed and Hippo were among the top five risers after increasing 48 percent to USc4,20 and 44 percent to USc75,3 in that order.
Financial services group ZB was the only loser, dropping 2,94 percent of value to USc16,50.
The bourse’s mining of Bindura, RioZim, Falgold and Hwange registered significant gains in the half-year, rising 23 percent.
In the year to December 2016, RioZim reported a profit of US$2,5 million from a US$8,8 million loss in the previous year, while revenue grew by 15 percent to US$65,2 million from $56,5 million a year earlier.
BNC saw a marginal increase in revenue from US$42,5 million to US$45 million, while after tax profit at US$607 000 was almost flat for the year to December 31, 2016.
Hwange Colliery Company Limited narrowed its net loss by 22 percent to US$89,9 million from US$115 million recorded the prior year.
However, Falgold’s loss for the half-year to March 31, 2017 worsened to US$2,4 million from US$351 000 the prior year, with the firm being plagued by increasing costs, falling revenue and declining volumes.
