Zimbabwe Stock Market Weekly Review

The equities market took a knock for the second consecutive week as profit taking continues to take toll on a market that had been on a sustained rally since the beginning of the year.

At the close of the 5 trading days to Wednesday March 4, 2020, the ZSE overall market capitalisation had lost 2,42 percent to close at $60,2 billion.

From an index point of view, three of the ZSE’s top five indices were on the downside with the All Share Index the biggest loser down 4,09 percent to 467,77.

Big cap stocks which make up the ZSE Top 10 index followed with a 4 percent loss to 392,48. Delta led the fallers in the segment with a 15,83 percent loss to close at 599,89 cents. OK Zimbabwe was also a notable loser down 12,04 percent to 169,94 cents.

Cassava Smarttech also closed negative after it lost 5,13 percent to 274,91 cents as was Econet down 5,11 percent to 275,19 cents.

It was, however, not all doom and gloom for the ZSE’s top ten counters as others closed positive.

Old Mutual which was up 5,39 percent to 5 000 cents. Yesterday the Group gave a performance update saying it expects a decline in annual profit after the distribution of Quilter PLC along with the unbundling of its stake in Nedbank Group Ltd. Profit after tax attributable to equity holders of Old Mutual is expected to fall by between 76 percent and 74 percent for the year to December 2019. However, excluding transactions in Quilter PLC, the financial services does see a strong increase in profit.

National Foods and Seed Co, counters that normally benefit post a drought season added 4,69 percent and 4,73 percent respectively. National Foods CEO Michael Lashbrook told Business Weekly in January that it expects demand for its maize products to be firm and has put in place a substantial import program of raw maize to meet demand.

Small cap stocks however remained in favour benefiting from what could be a shift from big cap counters.

The Small Cap index was up 7,05 percent to 1 569,90 probably benefiting from a 43,5 percent gain in Cafca to 1 425 cents.

CFI, which also has a very small market cap of just $75 million was unchanged at 70,75 cents. According to CFI’s trading update for the first quarter to December 31, 2019, sales volumes fell 17 percent compared to the same period in the prior year due to low consumer spending as the environment remained challenging. Volume performance across the group’s key segments also show consumer down trading to more affordable products as they seek value for money.

Edgars added 4,98 percent to 50,4 cents. The clothing retailer said in a cautionary statement released this week that it is considering raising capital through a rights offer to finance its expansion initiatives, the company indicated in a cautionary statement released on February 20, 2020.

Edgars’ managing director earlier indicated in a trading update released after the annual general meeting of July 11, 2019 that the group sought to expand its reach by opening new branches and upgrading those existing. Recently on the cards was the establishment of an Edgars store in Kadoma as well as Edgars Masvingo, Jet Masvingo and about 3 more new Jet Stores, funds permitting.

Getbucks was 20 percent firm at 14,4 cents with management telling shareholders this week that the value preservation strategy adopted by the group to acquire investment property in 2018 continued to yield results.

Managing director, Terrence Mudangwe told the Annual General Meeting that the bank’s strategy into the future will be anchored on five pillars, namely expanding the retail footprint, capital preservation, financial inclusion and lending to the agricultural sector and the mass market.