ZSE gains in post poll trading

The Zimbabwe Stock Exchange (ZSE) market capitalisation registered marginal gains for most of last week, as investors wrote off major change on the political front and adding 0,76 percent to close the week to July 17 higher at $11,99 billion in trading largely driven by foreign investors.

The outcome of an election, especially presidential polls, normally has a large impact on taxes, health care, immigration policies and regulations, policies and economic plans and visions of central government, which affect economies and business for months or years to come.

Negative perceptions about the victory of a particular candidate, as observed across world politics, may thus ignite a flight to safe havens by investors leading many, especially foreigners, to divest and send markets into tailspin.

Positive perceptions normally elicit bullish reactions from stock markets, as investors take positions in anticipation of dividends during era of the reign of particular candidates.

Last week’s gains in the ZSE market cap brought year-to-date gains to 20 percent, bucking the trend that characterised the equities market before and after the 2013 harmonised elections, depicting confidence in the new dispensation, which pledged to focus more on economics than politics to rebuild the economy.

Over $600 million was lost on ZSE in just one trading session amid selling pressure following the disputed election victory of former president Robert Mugabe by then MDC leader Morgan Tsvangirai in the 2013 polls.

ZSE’s Industrials plunged 11,09 percent as panicked investors fled the bourse in the 2013 post election market bloodbath that saw the heaviest sell-off since dollarisation of the domestic economy in February 2009.

The Industrials Index dropped 25,64 points or 11,09 percent to 205,57, trimming its gains in the year to 34,89 percent while the Mining Index was 1,33 points or 2,01  percent weaker at 65,00 as investors reacted to former President Mugabe’s win.

But this year most indicators traded either in positive territory or shed just marginally in reflection of normal investor sentiment or perception of the key fundamentals affecting particular ZSE listed stocks.

Typical of most elections post 2000, when opposition politics took a huge leap forward on the back of a wobbly economy and the height of trade unionism, the main opposition has disputed the outcome of this year’s elections.

Mr Nelson Chamisa of the MDC Alliance, fronting a handful of opposition parties forging a united front to dislodge the ruling ZANU-PF, polled 44,3 percent  and has challenged the incumbent, President Mnangagwa, who won this year’s slugfest with 50,8 percent of the vote, as announced by the Zimbabwe Electoral Commission.

The MDC Alliance’s election results court challenge is due for hearing by the Constitutional Court tomorrow and the verdict is expected by the end of the month, but it has been business as usual on Zimbabwe’s prime capital market.

Post the 2018 harmonised elections, the trend on ZSE has been nothing out of the ordinary really in terms of losses, gains and behaviour of key indicators with the bourse characterised by mixed trading at worst and marginal gains at best.

Last week the ZSE all-share index gained 0,89 percent to 112,77 while the top 10 index climbed 0,06 percent to close the week at 158,90.

The ZSE main Industrial index was 0,90 percent higher at 379,26 largely driven by telecoms giant Econet, which surged 0,01 percent to 120 cents and conglomerate Innscor, which edged up by 2,43 percent to 138 cents.

Other top gainers, in last week were Zimplow (17,25c), Getbucks (3,30c) and Padenga (65c), which rose 43,75 percent, 10 percent and 7,88 percent, showing little regard for the potentially bruising legal battle started by Chamisa’s MDC Alliance.

On a yearly basis, cable manufacturer Cafca has been the biggest beneficiary, climbing 150 percent to 75c, Zimplow which jumped 120 percent to 17,25c, Unifreight, which jumped 77,5 percent to 2,52c, Edgars which added  66,7 percent to 6,7c and African Sun, which piled on 52 percent to 7,32c.

Volumes traded during the week under review totalled 32,32 million shares and averaged 10,77 million shares per day.   Weekly turnover totalled on the ZSE was $4, 23 million. Average daily value traded was $1,41 million for the week.