ZSE outperforms regional peers

10 Feb, 2019 - 00:02 0 Views

The Sunday Mail

Tawanda Musarurwa
Senior Business Reporter

The Zimbabwe Stock Exchange (ZSE) outperformed its peers in Sub Saharan Africa (SSA) region in nominal terms, with the local bourse’s market capitalisation jumping by 96 percent last year.

But the bourse’s implied United States Dollar performance in Old Mutual Implied Rate (OMIR) terms slid 31 percent to $3,83 billion.

OMIR is a comparison of share prices for Old Mutual in Zimbabwe, South Africa and the United Kingdom where the share is simultaneously listed.

It is used as a proxy to compute the implied exchange rates for the three countries.

“SSA equity markets in 2018 slumped considerably following 2017’s rally and Zimbabwe, once again, outperformed SSA peers in nominal terms as the market capitalisation rose 95,8 percent despite a 31 percent slump in ‘real’ terms using the Old Mutual Implied rate (OMIR).

“The ZSE benchmark Industrial Index saw a 46,28 percent gain year-on-year vs SSA peers down 9,26 percent in USD for the year while the Mining Index advanced a further 59,89 percent,” said market analysts IH Securities.

A nominal term is an unadjusted number of something such as wages, stock prices, assets, and interest rates and is generally described in fixed monetary terms. On the other hand, a real term takes into account changes in price level over time.

“The only other top performing SSA equities market was Malawi, up 25,4 percent.

The Bourse Régionale des Valeurs Mobilières SA (BVRM), down 32,3 percent, continued on its downward trajectory, closing the year as the worst performer again, followed by South Africa, down 23,8 percent and Nigeria, down 19,3 percent.

“Of the 60 counters listed on the ZSE by the end of 2018, only 11 registered losses while 49 counters registered positive gains, a decline from 56 counters that registered gains in 2017,” they added.

ZSE total market capitalisation rallied to close 2018 at $19,52 billion.

And as at the close of last month, the ZSE’s total market value rose 7,5 percent or US$1,5 billion to close at US$20,8 billion.

The top performers on the ZSE last year included conglomerate Innscor Holdings which rose by 85 percent, beverages giant Delta Corporation, which was up by 70,6 percent and telecoms giant Econet Wireless Zimbabwe which rose by 54,9 percent,

The local bourse’s total value traded was up by 33,3 percent to $926,31 million during the period under review.

There are no barriers to investing on the ZSE. Local investors can trade freely as long as they have the resources. The limit for an individual foreign investor is 15 percent of total issued share capital whilst the aggregate limit per counter is 49 percent.

Foreign investors may exceed these thresholds with prior approval from the Reserve Bank of Zimbabwe and the ZSE.

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