The Sunday Mail
Business Reporter
LOCAL stocks recorded the first monthly gain of 2016 in April, with total market capitalisation rising 7,9 percent month-on-month to US$3,03 billion.
While the mainstream industrial index gained 8,4 percent to 105,79 points in the month, turnover was 14,5 percent weaker at US$14,05 million.
Earlier in the year, heavy losses driven by a sell-off by foreign investors, weakened the bourse and the industrial index resultantly slumped below the psychological 100-point mark as the free-fall continued.
Average daily trades for April came in at US$702 290. The resurgent demand in blue chip counters such as Delta helped narrow year-to-date losses to 7,9 percent. Total volumes traded rose 93,1 percent to 188 million shares.
In the month under review, Pelhams and Radar were struck off the ZSE’s official list. Pelhams applied for voluntary suspension on November 26, 2015 following its placement under liquidation on November 18, 2015 while trading of its shares was suspended on December 10, 2015 and was subsequently terminated for failing to meet listing requirements such as releasing quarterly updates.
The company is yet to settle its listing fees arrears. Radar applied for voluntary termination on October 6, 2015 and shareholders approved delisting at a February 25, 2016 extraordinary general meeting.
The mining index closed the month 3,23 percent up on the back of gains in RioZim and Bindura of 5,8 percent and two percent respectively.
The month’s top gainers were Proplastics, which rose 52,78 percent, and retail giant OK Zimbabwe (28,6 percent).
Delta, Innscor and Art rose 24,4 percent, 17,5 percent and 16,7 percent in that order in the month. However, Radar declined 35,1 percent and Hippo 18,5 percent. Ariston, Seed Co and ZPI completed the list of biggest losers falling by 13,5 percent, 12,5 percent and 8,4 percent correspondingly.
Beverages maker Delta, National Foods and Econet made the biggest contribution to total value traded, contributing 38 percent, 10 percent and seven percent respectively. Both Delta and Econet are yet to release their full-year earnings which analysts forecast will likely highlight weaknesses in the local economy.
Consumer spending has been strained further by the acute cash shortages in the economy. Last week, Reserve Bank of Zimbabwe Governor Dr John Mangudya said the apex bank would introduce bond notes to curb money flowing out of the country and cushion consumers against the cash crunch.
“Despite strained corporate earnings, the market has started registering notable gains and we expect the industrial index to remain in the positive as bids improve in counters such as BAT, Innscor and Delta,” said IH Securities in a recent research note.
Delta is expected to release its financials this week and its share price is forecast to reach US$1,03.
