Zimbabwe Stocks falter in March

Stocks weakened 3,21 percent in the month of March as the economy felt the effects of the coronavirus, closing the month with total market value of $58,56 billion.

World over, the spread of the Covid-19 has had negative effects resulting in global markets sliding with investors losing billions of dollars in investments.

The pandemic was first detected in China in 2019, before spreading crossing the globe with a million cases confirmed and thousands of deaths recorded.

Zimbabwe has nine confirmed cases and one death. Due to the pandemic, several companies in March began to downsize operations before President Mnangangwa declared it a National Disaster and announced a national lockdown that started on March 30, 2020.

Market watchers, however, contend that while this was a necessary measure to contain the spread of the virus, local industry will suffer as the economy was already struggling with high inflation and foreign currency shortages.

“Whilst this is a necessary corrective measure; we are naturally concerned about the inevitable post economic impact given the already existing structural frailty in the economy.

“It seems major mining companies have,  however, been granted exemption from the 21-day lockdown yet concerns remain over production capabilities as well as the logistics of deliveries to regional and global markets where demand for commodities may be fragile in the short term,” said brokerage firm, IH Securities in their monthly update.

By close of the month, the primary indicator, the ZSE All Share Index was down 3 percent to 456,12 points as weakness persisted in the month due to uncertainties associated with the pandemic.

The market’s top cap counters grouping — the ZSE Top 10 Index fell 6,64 percent to 370,74 points dragged by losses Econet, Cassava and Delta.

However, turnover for the month grew 18 percent to $425,74 million, with average daily trades of $19,35mn realised during the month.

The most significant contributions to total value traded were Delta, Old Mutual and Innscor that accounted for 17,9 percent, 15,74 percent and 9,57 percent in that order.

Total volume traded also grew by 37,69 percent after 237,76 million shares exchanged.

During the month, Powerspeed fell the heaviest with a 71 percent decline to 17,6 cents followed by Dawn that went down 66,22 percent to 5,5 cents.

Clothing retailer, Edgars eased 58,34 percent to 20 cents while nickel producer — Bindura dropped 44 percent to 30 cents.

At 3,2 cents, brick making firm Willdale was 43 percent below prior month.

On the upside, First Mutual Properties surged 260 percent to $1,09 followed by cables manufacturer, Cafca that put on 59 percent to $19. Financial services group, CBZ went up 44 percent to $1,54 ,while peers FBC ticked 33 percent to $1,20.

Agri-industrial giant National Foods gained 32 percent to $26,60 wrapping up the month’s top five risers. For NatFoods, the performance of the agriculture season will have a direct impact on its operations. Prior the disruptions caused by Covid-19, the 2019/20 season was already impacted by drought, erratic power supplies for irrigation as well as limited funding.

The group has already indicated its contract farming projects were negatively affected by funding constraints. For the half year to December 31, 2019, NatFoods recorded total volumes decline due to low sales volumes across segments, except for the maize meal division where demand remained firm. – Herald